Can parental leave for fathers alleviate the motherhood penalty? Research has overwhelmingly indicated that mothers face setbacks in the workforce compared to men. They take additional time off for childbirth, interrupting their careers, and take responsibility for more of the unpaid care work at home. With this “mommy penalty” in mind, Allison Dunatchik of the University of Pennsylvania and Berkay Özcan of the London School of Economics examined the impact of a non-transferable paternity leave policy - that is, one reserved expressly for fathers - on mothers’ labour force participation and wages. Using a difference-in-difference estimation, they compared mothers in Quebec, where the policy was introduced, to similar mothers in neighboring Ontario.
Dunatchik and Özcan find that the policy does indeed have an impact on mothers’ labour outcomes - in the short term, at least. Quebec mothers exposed to the policy are 5 percentage points more likely to participate in the labour force and to work full-time, 5 percentage points less likely to work part-time, and 4 percentage points less likely to be unemployed than they would have been without the policy. There is no discernible impact on wages, perhaps indicating either the policy’s limited influence or the long-term trajectory of increases in wages. That said, the authors observe that the policy’s effects are largest two to three years after its enactment - in the wake of the Great Recession. As time passes, its impact reduces in size and significance, raising questions about the long-term effectiveness of such policies as well as its effectiveness during periods of economic downturn.