A Firm-Side Perspective on Parental Leave

54 Pages Posted: 26 Jun 2021

See all articles by Mathias Huebener

Mathias Huebener

German Institute for Economic Research (DIW Berlin)

Jonas Jessen

German Institute for Economic Research (DIW Berlin); European University Viadrina

Daniel Kühnle

University of Duisburg-Essen

Michael Oberfichtner

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

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Abstract

Motherhood and parental leave interrupt employment relationships, likely imposing costs on firms. We document that mothers who are difficult to replace internally take shorter leave and that their firms hire replacements more often. Introducing more generous parental leave benefits erases the link between mothers' internal replaceability and their leave duration. In firms with few internal substitutes this reduces employment in the short-, but not longer-term. Firms respond by hiring fewer women of childbearing age into occupations where they are difficult to replace internally. Taken together, motherhood and generous parental leave policies burden firms that have few internal substitutes available.

JEL Classification: J16, J18, J24

Suggested Citation

Huebener, Mathias and Jessen, Jonas and Kühnle, Daniel and Oberfichtner, Michael, A Firm-Side Perspective on Parental Leave. IZA Discussion Paper No. 14478, Available at SSRN: https://ssrn.com/abstract=3874350 or http://dx.doi.org/10.2139/ssrn.3874350

Mathias Huebener (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Jonas Jessen

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstr
58
Berlin
Germany

European University Viadrina ( email )

Germany

Daniel Kühnle

University of Duisburg-Essen

Lotharstrasse 1
Duisburg, 47048
Germany

Michael Oberfichtner

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Schloßplatz 4
Erlangen, DE 91054
Germany

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