The short- and long-term effects of family-friendly policies on mothers' employment

De Quinto, Alicia; González Luna, Libertad

doi:http://dx.doi.org/10.1016/j.labeco.2024.102672

The short- and long-term effects of family-friendly policies on mothers' employment

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De Quinto A, González L. The short- and long-term effects of family-friendly policies on mothers' employment. Labour Econ. 2025 Jan;92:102672. DOI: 10.1016/j.labeco.2024.102672

Abstract

Countries often encourage part-time work among new parents as part of their family policies, aiming to foster mothers' labor market attachment. However, this approach may unintentionally impede women's long-term career prospects. We examine the impact of a 1999 Spanish reform that allowed parents to reduce their working hours by up to a half while their youngest child was under age 6, along with job protection measures. Leveraging eligibility rules, we follow a regression kink design, comparing ineligible women to mothers who had varying lengths of eligibility, and tracking their subsequent work trajectories. Our findings show that longer eligibility led to a modest increase in maternal part-time work during her child's early years, with mothers working approximately one additional day part-time for each extra month of eligibility. This increase in part-time work substituted for days spent in unemployment rather than reducing full-time work, leading to a rise in earnings. In the long term, extended eligibility also led to improvements in both employment and earnings. Overall, we find that the policy had a positive impact on the labor supply and earnings of women with children, both in the short and long term.