Parental leave and mothers' careers: The relative importance of job protection and cash benefits

Rafael Lalive, Analia Schlosser, Andreas Steinhauer, Josef Zweimuller

Research output: Contribution to journalArticlepeer-review

Abstract

Job protection and cash benefits are key elements of parental leave (PL) systems. We study how these two policy instruments affect return-to-work and medium-run labour market outcomes of mothers of newborn children. Analysing a series of major PL policy changes in Austria, we find that longer cash benefits lead to a significant delay in return-to-work, particularly so in the period that is job-protected. Prolonged parental leave absence induced by these policy changes does not appear to hurt mothers' labour market outcomes in the medium run. We build a non-stationary model of job search after childbirth to isolate the role of the two policy instruments. The model matches return-to-work and return to same employer profiles under the various factual policy configurations. Counterfactual policy simulations indicate that a system that combines cash with protection dominates other systems in generating time for care immediately after birth while maintaining mothers' medium-run labour market attachment.
Original languageEnglish
Pages (from-to)219-265
Number of pages47
JournalReview of Economic Studies
Volume81
Issue number1
Early online date27 Sep 2013
DOIs
Publication statusPublished - Jan 2014

Keywords

  • parental leave
  • family and work obligations
  • return-to-work
  • labour supply
  • earnings
  • family earnings gap

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