Parental leave and mothers' careers: The relative importance of job protection and cash benefits

Rafael Lalive, Analía Schlosser, Andreas Steinhauer, Josef Zweimüller

Research output: Contribution to journalArticlepeer-review


Job protection and cash benefits are key elements of parental leave (PL) systems. We study how these two policy instruments affect return-to-work and medium-run labour market outcomes of mothers of newborn children.Analysing a series of majorPLpolicy changes inAustria,wefind that longer cash benefits lead to a significant delay in return-to-work, particularly so in the period that is job-protected. Prolonged parental leave absence induced by these policy changes does not appear to hurt mothers' labour market outcomes in the medium run.We build a non-stationary model of job search after childbirth to isolate the role of the two policy instruments. The model matches return-to-work and return to same employer profiles under the various factual policy configurations. Counterfactual policy simulations indicate that a system that combines cash with protection dominates other systems in generating time for care immediately after birth while maintaining mothers' medium-run labour market attachment.

Original languageEnglish
Article numberrdt028
Pages (from-to)219-265
Number of pages47
JournalReview of Economic Studies
Issue number1
StatePublished - Jan 2014


FundersFunder number
Swiss National Center of Competence in Research LIVES
Schweizerischer Nationalfonds zur Förderung der Wissenschaftlichen Forschung
Austrian Science FundS 10304-G16


    • Earnings
    • Family and work obligations
    • Family earnings gap
    • Labour supply
    • Parental leave
    • Return-to-work


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