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Parental Leave, Worker Substitutability, and Firms' Employment

  • Motherhood and parental leave are frequent causes of worker absences and employment interruptions, yet we know little about their effects on firms. Based on linked employer-employee data from Germany, we examine how more generous leave benefits affect firm-level employment and hiring decisions. Focusing on small- and medium-sized firms, we show that more generous benefits reduce firm-level employment in the short term, which is driven by firms with few internal substitutes for the absent mother. However, firms do not respond to longer expected absences by hiring fewer young women, even when few internal substitutes are available. To rationalise the findings, we show that replacement hiring occurs largely before the expected absence and that firms hire more external replacements when fewer internal substitutes are available. These findings indicate that extended leave does not harm _rms when these can plan for the longer worker absences.

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Metadaten
Document Type:Working Paper
Language:English
Author(s):Mathias Huebener, Jonas Jessen, Daniel Kuehnle, Michael Oberfichtner
Parent Title (English):Berlin School of Economics Discussion Papers
Hertie Collections (Serial Number):Berlin School of Economics Discussion Papers (7)
Publication year:2022
Publishing Institution:Hertie School
Number pages:52
Related URL:https://berlinschoolofeconomics.de/insights/bse-discussion-papers
DOI:https://doi.org/10.48462/opus4-4674
Release Date:2022/12/13
Tag:Parental leave, worker absences, worker substitutability
Edition:No. 7
Hertie School Research:BerlinSchoolOfEcon_Discussion_Papers
Licence of document (German):Creative Commons - CC BY - 4.0 International
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