Employer Responses to Family Leave Programs

Arbeitspapier

Search frictions make worker turnover costly to firms. A three-month parental leave expansion in Sweden provides exogenous variation that we use to quantify firms' adjustment costs upon worker absence and exit. The reform increased women's leave duration and likelihood of separating from pre-birth employers. Firms with greater exposure to the reform hired additional workers and increased incumbent hours, incurring additional wage costs. These adjustment costs varied by firms' availability of internal and external substitutes. Economy-wide analyses show that a higher reform exposure is correlated with fewer hires and lower starting wages of young women compared to men and older women.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 13833

Classification and Topics

• Classification: Wirtschaft ; Fertility; Family Planning; Child Care; Children; Youth ; Economics of Gender; Non-labor Discrimination ; Labor Force and Employment, Size, and Structure ; Time Allocation and Labor Supply ; Wage Level and Structure; Wage Differentials
• Subject: parental leave ; firm-specific human capital ; statistical discrimination

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ginja, Rita ; Karimi, Arizo ; Xiao, Pengpeng
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/227360
• Last update: 10.03.2025, 11:43 AM CET