Making Leave Easier: Better Compensation and Daddy-Only Entitlements
February 24, 2014
In 2006, Quebec enacted a landmark reform to paid parental leave that greatly improved the generosity of entitlements and established a father's non-transferable right to paid leave. Using data from the Employment Insurance Coverage Survey and employing a difference-in-differences setup, I find that the reform was associated with a striking rise in fathers' participation: an increase of 52 percentage points in the probability of a father receiving parental leave benefits and an increase in fathers' leave duration by 3 weeks. Further, there is evidence of an intra-household flypaper effect via the labeling of leave as `daddy-only', i.e., the allocation of leave within a household appears to be influenced by the framing of legal rights even when they do not bind. The reform was associated with an increase of 11 percentage points in mothers' participation rates, and the duration of the average maternity leave increased by over half a month under the new program. I find no change in mothers' exit rates from the labor market on average but do find an increase in the probability of returning to the pre-birth employer if her husband took leave. The reform was also associated with a significant reduction in the average income loss experienced by households in the month following the birth.
Keywords: maternity leave, paternity leave, daddy quota, benefit claims, flypaper effect, parental leave
JEL Classification: J13, J22, J16, J18, J53, I38
Date posted: September 15, 2012 ; Last revised: December 7, 2014