Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/295866 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 16843
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Motherhood and parental leave are frequent causes of worker absences and employment interruptions, yet we know little about their effects on firms. Based on linked employer-employee data from Germany, we examine how parental leave absences affect small- and medium-sized firms. We show that they anticipate the absence with replacement hirings in the six months before childbirth. A 2007 parental leave reform extending leave absences reduces firm-level employment and total wages in the first year after childbirth, driven by firms with few internal substitutes for the absent mother. However, we do not find longer-term effects on firms' employment, wage-bill, or likelihood to shut down. We find that the reform increases replacement hirings, but firms directly affected do not respond to longer expected absences of mothers by subsequently hiring fewer young women. Overall, our findings show that extended parental leave does not have a lasting impact on firms when these can anticipate the absences.
Subjects: 
parental leave
worker absences
worker substitutability
JEL: 
J16
J18
J24
Document Type: 
Working Paper

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