“…Our study can also be seen as enhancing our broad understanding of labor demand as a part of firms' production process and the possible presence of labor market frictions, expanding on much theoretical work (Stole & Zwiebel, 1996a,b;Cahuc et al , 2008;Acemoglu & Hawkins, 2014;Kaas & Kircher, 2015). In this vein, our paper contributes to the empirical literature on worker absences derived from sources other than parental leave (Azoulay et al , 2010;Bartel et al , 2014;Bennedsen et al , 2019;Drexler & Schoar, 2014;Golding et al , 2005;Gruber & Kleiner, 2012;Herrmann & Rockoff, 2012;Isen, 2013;Jaravel et al , 2018;Jäger & Heining, 2019;Bertheau et al , 2019;Krueger & Mas, 2004;Mas, 2008). As we discuss later, however, absences due to parental leave differ markedly from other types of worker absences by being temporary with a known end date and by being highly anticipated.…”