Parental Leave and Mothers' Careers: The Relative Importance of Job Protection and Cash Benefits

Rafael Lalive, Analia Schlosser, Andreas Steinhauer, Josef Zweimuller

Research output: Working paperDiscussion paper

Abstract / Description of output

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 labor market outcomes of mothers of newborn children. Analyzing 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’ labor market outcomes in the medium run. We build a non-stationary model of job search after child-birth 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 labor market attachment.
Original languageEnglish
Publication statusPublished - 30 Jul 2013

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