The Economic Consequences of Parental Leave Mandates: Lessons from Europe

Abstract

This study investigates the economic consequences of rights to paid parental leave in nine European countries over the 1969 through 1993 period. Since women use virtually all parental leave in most nations, men constitute a reasonable comparison group, and most of the analysis examines how changes in paid leave affect the gap between female and male labor market outcomes. The employment-to-populations ratios of women in their prime childbearing years are also compared with those of corresponding aged men and older females. Parental leave is associated with increases in women's employment, but with reductions in their relative wages at extended durations.