Law, Economics and Culture: Theory of Mandated Benefits and Evidence from Maternal Leave Policies

33 Pages Posted: 25 Apr 2011 Last revised: 15 Apr 2015

See all articles by Yehonatan Givati

Yehonatan Givati

Hebrew University of Jerusalem - Faculty of Law

Ugo Troiano

University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 16, 2011

Abstract

Why do some countries mandate a long maternity leave, while others mandate only a short one? In a standard mandated benefits model mandated maternity leave makes hiring women more costly, and therefore reduces women's employment and real wages. We incorporate into the standard model society's tolerance of gender based discrimination, showing that the optimal length of maternity leave depends on it. The less tolerant society is of gender based discrimination the longer the maternity leave it will mandate. Relying on recent research in psychology and linguistics according to which patterns in languages offer a window into their speakers' dispositions, we collected new data on the number of gender differentiated personal pronouns across languages, to capture societies' attitudes towards gender based discrimination. We first confirm, using within country language variation, that our linguistic measure is indeed correlated with attitudes towards gender based discrimination. Then, using cross-country data on length of maternity leave, while controlling for political, economic and demographic parameters, we find a strong correlation between our language based measure of attitudes and the length of maternity leave.

JEL Classification: H2, J7, K31, O57, Z1

Suggested Citation

Givati, Yehonatan and Troiano, Ugo, Law, Economics and Culture: Theory of Mandated Benefits and Evidence from Maternal Leave Policies (February 16, 2011). Journal of Law and Economics 55: 339-364 (2012); Harvard Law and Economics Discussion Paper No. 38. Available at SSRN: https://ssrn.com/abstract=1816763

Yehonatan Givati (Contact Author)

Hebrew University of Jerusalem - Faculty of Law ( email )

Jerusalem
Mount Scopus, 91905
Israel

Ugo Troiano

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

HOME PAGE: http://sites.google.com/a/umich.edu/troiano

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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