The Liberalization of Maternity Leave Policy and the Return to Work after Childbirth in Germany

Abstract

German federal law has increased the potential duration of maternity leave five times since 1985. A theretical model is presented that demonstrates that the return to work hazard rate declines as potential duration cannot decline unless the mother's employment conditions or career expectations can change. Return to work hazards are estimated from the German Socio-Economic Panel for women bearing children in Germany in the period 1984-1991. The estimates are used to predict hazards and cumulative return probabilities for the first-time mothers and mothers with a previous birth. As potential duration increases, the cumulative return rate pattern at potential duration is consistent with the hypotheses that employment conditions of career expectations frequently change for mothers taking longer leaves.