Mom’s Out: Employment after Childbirth and Firm-Level Responses

Abstract

This paper explores how firms respond to women leaving work after childbirth. As a shifter in mothers’ quits, we use a reform that extended the duration of the unemployment benefits for which Italian mothers are eligible if they resign within 12 months of giving birth. We find that, over a three-year term, mothers have higher quit and non-employment probabilities, whereas layoffs decrease slightly. Firms employing women who are more likely to leave work after childbirth display significantly higher net hiring and turnover rates, especially of young women. The growth in female hiring mainly involves temporary contracts, indicating potential statistical discrimination impacting job quality for women.

Keywords: quits, hirings, separations, unemployment benefits, statistical discrimination, child penalty

JEL Classification: J16, J23, J21, J38, J65