Employer Responses to Family Leave Programs
- (pp. 107-35)
Abstract
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. 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 coworkers to make it coworkers' hours, incurring wage costs corresponding to 10 full-time equivalent months in addition to replacing the workers. These adjustment costs varied by firms' availability of internal substitutes. We also analyze a daddy-month reform and find similar employer responses to male workers' leave, albeit smaller in magnitude.Citation
Ginja, Rita, Arizo Karimi, and Pengpeng Xiao. 2023. "Employer Responses to Family Leave Programs." American Economic Journal: Applied Economics, 15 (1): 107-35. DOI: 10.1257/app.20200448Additional Materials
JEL Classification
- J16 Economics of Gender; Non-labor Discrimination
- J22 Time Allocation and Labor Supply
- J32 Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
- J64 Unemployment: Models, Duration, Incidence, and Job Search
- M52 Personnel Economics: Compensation and Compensation Methods and Their Effects
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