The Response of Firms to Maternity Leave and Sickness Absence

83 Pages Posted: 31 May 2022

See all articles by Ian M. Schmutte

Ian M. Schmutte

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics

Meghan Skira

University of Georgia

Abstract

We study how firms respond to predictable, but uncertain, worker absences arising from maternity and non-work-related sickness leave. Using administrative data on over 1.5 million spells of leave in Brazil, we identify the short-run effects of a leave spell starting on firms' employment, hiring, and separations. Firms respond immediately by increasing hiring, but the increase is substantially less than one-for-one replacement. Hiring responses are more pronounced for absences arising in occupations with more transferable skills and in firms operating in thicker labor markets. Overall, our results imply that using external markets is costly and firms manage absences through other channels.

Keywords: employment determination, hires, job turnover, maternity leave, sick leave

JEL Classification: J23, J21, J63, J68, J13

Suggested Citation

Schmutte, Ian M. and Skira, Meghan, The Response of Firms to Maternity Leave and Sickness Absence. IZA Discussion Paper No. 15336, Available at SSRN: https://ssrn.com/abstract=4123777 or http://dx.doi.org/10.2139/ssrn.4123777

Ian M. Schmutte (Contact Author)

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics ( email )

Athens, GA 30602-6254
United States

HOME PAGE: http://people.terry.uga.edu/schmutte/

Meghan Skira

University of Georgia ( email )

Athens, GA 30602-6254
United States

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