Motherhood and parental leave interrupt employment relationships, likely imposing costs on firms. We document that mothers who are difficult to replace internally take shorter leave and that their firms hire replacements more often. Introducing more generous parental leave benefits erases the link between mothers’ internal replaceability and their leave duration. In firms with few internal substitutes this reduces employment in the short-, but not longer-term. Firms respond by hiring fewer women of childbearing age into occupations where they are difficult to replace internally. Taken together, motherhood and generous parental leave policies burden firms that have few internal substitutes available.
Mathias Huebener is postdoctoral research associate at DIW Berlin. His research focuses on human capital formation and the role of public policies in this process.The presentation will be held on-site and may be followed online via live-stream. To receive further information and event details, please sign up here.