Scandinavian Working Papers in Economics
Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy
No 2020:18: Employer responses to family leave programs
Rita Ginja (), Arizo Karimi () and Pengpeng Xia ()
Additional contact information
Rita Ginja: Uppsala Center for Labor Studies, Postal: Uppsala Center for Labor Studies (UCLS), Uppsala Sweden
Arizo Karimi: Uppsala Center for Labor Studies, Postal: Uppsala Center for Labor Studies (UCLS), Uppsala Sweden
Pengpeng Xia: Yale University, Postal: Department of Economics, Yale University.
Abstract: Search frictions make worker turnover costly to firms. A three-month parental l eave 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 prebirth 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.
Keywords: Parental Leave; Firm-Specific Human Capital; Statistical Discrimination
JEL-codes: J13; J16; J21; J22; J31
62 pages, November 2, 2020
Full text files
wp-2020-18-employer-...y-leave-programs.pdfFull text
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