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The Impact of Paid Parental Leave on Labour Supply and Employment Outcomes

49 Pages Posted: 21 Mar 2016  

Barbara Broadway

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; ARC Centre of Excellence for Children and Families over the Life Course

Guyonne R.J. Kalb

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; IZA; ARC Centre of Excellence for Children and Families over the Life Course

Duncan McVicar

Queen's University Belfast

Bill Martin

University of Queensland - Institute for Social Science Research (ISSR)

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Abstract

The introduction of the Australian Paid Parental Leave scheme in 2011 provides a rare opportunity to estimate the labour supply and employment impacts of publicly-funded paid leave on mothers in the first year post-partum. The almost universal coverage of the scheme coupled with detailed survey data collected specifically for this purpose means that eligibility for paid leave under the scheme can be plausibly taken as exogenous following a standard propensity score matching exercise. In line with much of the existing literature, we find a positive impact on leave taking in the first half year and on the probability of eventually returning to work in the first year. The paper provides new evidence of a positive impact on continuing in the same job and under the same conditions. Further new evidence shows that disadvantaged mothers – low income, less educated, without access to employer-funded leave – respond most to the scheme.

Keywords: labour supply, parental leave, mothers, duration analysis, propensity score matching

JEL Classification: J13, J18, J22

Suggested Citation

Broadway, Barbara and Kalb, Guyonne R.J. and McVicar, Duncan and Martin, Bill, The Impact of Paid Parental Leave on Labour Supply and Employment Outcomes. IZA Discussion Paper No. 9801. Available at SSRN: https://ssrn.com/abstract=2750284

Barbara Broadway (Contact Author)

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

111 Barry St, FBE Building Level 5
The University of Melbourne
Melbourne, Victoria 3010
Australia
+61390354565 (Phone)
+6183442111 (Fax)

HOME PAGE: http://www.melbourneinstitute.com/

ARC Centre of Excellence for Children and Families over the Life Course ( email )

Guyonne Kalb

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

ARC Centre of Excellence for Children and Families over the Life Course ( email )

189 Berkeley Street
Melbourne
Australia

Duncan McVicar

Queen's University Belfast ( email )

25 University Square
Belfast, BT7 1NN
Ireland

Bill Martin

University of Queensland - Institute for Social Science Research (ISSR) ( email )

North 3 (Bldg 39A)
St Lucia, Queensland QLD 4072
Australia

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