The Impact of Paternity Leave on Fathers’ Future Earnings

Abstract

Using Norwegian registry data, we investigate the effect of paternity leave on fathers' long-term earnings. If the paternity leave increased long-term father involvement, then we should expect a reduction in fathers' long-term earnings as they shift time and effort from market to home production. For identification, we use the Norwegian introduction of a paternity-leave quota in 1993, reserving four weeks of the total of 42 weeks of paid parental leave exclusively for the father. The introduction of the paternity-leave quota led to a sharp increase in rates of leavetaking for fathers. We estimate a difference-in-differences model that exploits differences in fathers' exposure to the paternity-leave quota by the child's age and year of observation. Our analysis suggests that four weeks of paternity leave during the child's first year decreases fathers' future earnings, an effect that persists through our last point of observation, when the child is 5 years old. A battery of robustness tests supports our results.

Fathers on Leave Alone in Iceland: Normal Paternal Behaviour?

“…When the children born in 1997 were 3 years old 36 % were cared for evenly by their fathers and mothers, for children born 2003 and 2009 the fi gures were 49 % and 59 % respectively. This is in line with results from other countries, showing that fathers that are active from the beginning continue to shoulder a greater share of child care than those who have not been very active while the child was very young (Kitterød 2013 ;Nepomnyaschy and Waldfogel 2007 ;Rege and Solli 2010 ;Tanaka and Waldfogel 2007 ). While not claiming that this is solely due to the impact of the new parental leave a comparison of parents where the fathers took parental leave and those where he did not show much more involvement from those fathers that used parental leave (Arnalds et al 2013 ).…”

Earnings and first birth probability among Norwegian men and women 1995-2010

“…In 1993, one month reserved exclusively for the father was added to the parental leave, and in the period 1993-2003, more than 70% of Norwegian men took at least some leave when their first or second child was born (Duvander, Lappegård, and Andersson 2010). Though the career breaks often were relatively short, Rege and Solli (2013) find that the father's quota caused significant reduction in men's long term earnings. 7 Furthermore, men with higher earnings were slightly more likely to use the fathers' quota (Lappegård 2008).…”

Are All of the Good Men Fathers? The Effect of Having Children on Earnings.

“…As can be seen, the main results are unchanged. For studies on the paternity leave reform, see Rege and Solli (2010). Table C2 in Appendix C reports the complete replication results on the restricted sample.…”