What is the case for paid maternity leave?
Kari Vea Salvanes, Magne Mogstad, Katrine Vellesen Løken og Gordon B. Dahl.
Photo: MIT Press Journals
Review of Economics and Statistics, volume 98, issue 4, pp. 655-670, October 2016.
We assess the case for generous government-funded maternity leave, focusing on a series of policy reforms in Norway that expanded paid leave from 18 to 35 weeks. We find the reforms do not crowd out unpaid leave and that mothers spend more time at home without a reduction in family income. The increased maternity leave has little effect on children's schooling, parental earnings and labor force participation, completed fertility, marriage, or divorce. The expansions, whose net costs amounted to 0.25% of GDP, have negative redistribution properties and imply a considerable increase in taxes at a cost to economic efficiency.