Effects of Parental Leave Policies on Female Career and Fertility Choices
McMaster University, Department of Economics Working Paper No. 2016-10
50 Pages Posted: 17 Feb 2017
Date Written: October 2, 2016
This paper constructs and estimates a dynamic discrete choice structural model of female employment and fertility decisions that incorporates job protection and cash benefits of parental leave legislation. The estimated structural model is used for ex ante evaluation of policy reforms that change the duration of job protection and/or the arrangement for cash benefits. Counterfactual simulations indicate that introducing an initial one-year job protection policy increases maternal employment significantly, but extending the existing job protection period from one to three years has little effect. The employment effects of cash benefits also seem modest. Overall, parental leave policies have little effect on fertility.
Keywords: Parental Leave, Female Labor Supply, Discrete Choice Model, Structural Estimation
JEL Classification: J13, J22, J24
Suggested Citation: Suggested Citation