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How Do Firms Respond to Parental Leave Absences?

Author

Listed:
  • Brenøe, Anne Ardila

    (University of Zurich)

  • Krenk, Ursa

    (University of Zurich)

  • Steinhauer, Andreas

    (University of Edinburgh)

  • Zweimüller, Josef

    (University of Zurich)

Abstract

How do firms adjust their labor demand when a female employee takes temporary leave after childbirth? Using Austrian administrative data, we compare firms with and without a birth event and exploit policy reforms that significantly altered leave durations. We find that (i) firms adjust hiring, employment, and wages around leave periods, but these effects fade quickly; (ii) adjustments differ sharply by gender, reflecting strong gender segregation within firms; (iii) longer leave entitlements extend actual leave absences but have only short-term effects; and (iv) there is no impact on firm closure up to five years after birth.

Suggested Citation

  • Brenøe, Anne Ardila & Krenk, Ursa & Steinhauer, Andreas & Zweimüller, Josef, 2025. "How Do Firms Respond to Parental Leave Absences?," IZA Discussion Papers 17845, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17845
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    More about this item

    Keywords

    absence duration; gender; labor demand; labor supply; firms; family leave;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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