Parental Leave, Worker Substitutability, and Firms' Employment

Mathias Huebener, Jonas Jessen, Daniel Kuehnle and Michael Oberfichtner

No 7, Berlin School of Economics Discussion Papers from Berlin School of Economics

Abstract: 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.

Keywords: Parental leave; worker absences; worker substitutability (search for similar items in EconPapers)
JEL-codes: J16 J18 J24 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2022-12-13
New Economics Papers: this item is included in nep-bec, nep-gen and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://opus4.kobv.de/opus4-hsog/files/4674/BSE_DP_0007.pdf (application/pdf)

Related works:
Working Paper: Parental Leave, Worker Substitutability, and Firms' Employment (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdp:dpaper:0007

DOI: 10.48462/opus4-4674

Access Statistics for this paper

More papers in Berlin School of Economics Discussion Papers from Berlin School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Reiter ().