RT Journal Article
SR Electronic
T1 Firm and Worker Responses to Extensions in Paid Maternity Leave
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 0322-12232R2
DO 10.3368/jhr.0322-12232R2
A1 Machado, Cecilia
A1 Neto, Valdemar
A1 Szerman, Christiane
YR 2024
UL http://jhr.uwpress.org/content/early/2024/05/01/jhr.0322-12232R2.abstract
AB This paper investigates how firms and workers respond to a voluntary government-funded program increasing the duration of paid maternity leave from four to six months in Brazil. We show that larger, higher-paying, and more productive firms are more likely to provide extended leaves to workers. Exploiting the gradual implementation of extended leave across firms and the exact time of leave-taking, we present four key findings. First, we find an incomplete take-up of 35 percent among eligible workers, largely driven by those with high socioeconomic status. Second, firms and workers strategically defer job separations to extract rents from the government. Third, extended leave has no long-term impact on maternal labor market outcomes. Fourth, job security and information transmission about leave extensions boost take-up and reduce deferred job separations. The results illustrate that distributional concerns can justify the mandated provision of extensions in paid maternity leave.