Earmarked paternity leave increases parental wellbeing

Pontus Korsgren, Max Van Lent 19 February 2022

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The arrival of a child comes with many changes for families. To give parents time to cope with these changes, there is parental leave. This is often partially paid leave that parents can take in the first year(s) after childbirth. The aim of parental leave is to provide families with a good start in terms of health, division of caring tasks, relational stability, and continuity of mothers’ employment. However, most of the leave offered by these policies has been taken up by mothers. This has broader consequences. For example, studies have shown that having children is the main reason for the persistence of the gender wage gap (Kleven et al. 2018, 2019).

To counter these side effects, some countries have been offering parental leave specifically for fathers, (‘earmarked paternity leave’). Notably, in 2019 the Council of the European Union introduced the Directive on Work–Life Balance for Parents and Carers. The directive includes an individual right to four months of parental leave, of which two months are non-transferable between the parents and (at least partly) paid. Earmarked paternity leave ensures that part of the parental leave – varying from a couple of days to multiple months – is exclusively reserved for fathers and cannot be transferred to the mother. The evidence on the economic impacts of earmarked paternity leave policies is mixed. The uptake of leave by fathers can reduce the motherhood penalty by enabling mothers to return to the labour market (Norman et al. 2014, Fagan and Norman 2016) and increase the relative income of women within couples (Druedahl et al. 2019). Paternity leave quotas can also lead to a more equal division of home production tasks (Hook 2006, Kotsadam and Fiseraar 2011, 2013, Almqvist and Duvander 2014, Bünning 2015, Tamm 2018 and Patnaik 2019) and decrease fertility (Farré and González 2019). Moreover, while the quotas have been found to increase parental separations in Sweden (Avdic and Karimi 2018), the opposite effect has been documented in Iceland (Olafsson and Steingrimdottir 2020). While these economic effects have been widely studied, albeit without conclusiveness, the impact of paternity leave quotas on wellbeing is unclear and, as of yet, unexplored.

There are several possible ways – both positive and negative – by which earmarked paternity leave may affect life satisfaction in theory. Because paternity leave policies lead to persistent changes in the division of tasks within the household, they may directly affect overall life satisfaction. For example, this may occur because of better bonding between fathers and their children or due to changes in parents’ activities including work or leisure that have differing levels of enjoyment. Paternity leave can also affect the number of children, which may affect parents’ wellbeing directly. Finally, the positive impact of paternity leave on the development of children is expected to increase parents’ life satisfaction.

Besides general life satisfaction, one may expect a change in job satisfaction and the work-life balance of parents. Paternity leave quotas are typically introduced with the intention to increase mothers’ participation in the labour market and increase fathers’ share of work in the household, which may also come at the expense of less time spent in the labour market by fathers. The increase in opportunities for mothers to work in the labour market may increase work-life balance and satisfaction with their job. For fathers, the effects are more ambiguous. On the one hand, the increase in family focus may improve work-life balance for fathers. On the other hand, the additional amount of home production may increase fathers’ demands in the household and therefore puts more pressure on their work time in the labour market. 

In a new paper (Korsgren and Van Lent 2022), we study the impact of offering earmarked paternity leave on parental wellbeing. We use data from the European Social Survey, which includes information on the year of birth of respondents’ children and parents’ life satisfaction, job satisfaction, and work-life balance. We combine this with data on earmarked paternity leave policies in Europe to estimate the effect of earmarked paternity leave policies on wellbeing. Specifically, we compare parents who have their first child before the introduction of a paternity leave quota policy, with parents who have their first child after the policy introduction. Using an extensive set of control variables, including country and survey wave fixed effects, we compare the wellbeing of parents with children of the same age who experienced a paternity leave quota with parents with a child of the same age in a country where there is no paternity leave quota (at the time of measurement). 

Our results show that eligibility for earmarked paternity leave increases life satisfaction by 10.8 percentage points. Interestingly, this effect is much stronger for mothers than for fathers, despite the earmarked leave increasing the amount of leave taken by fathers, not mothers. While both mothers and fathers benefit in terms of life satisfaction from being eligible to earmarked paternity leave, mothers’ life satisfaction increases by 30% more than that of fathers.

Our data are not suitable for clearly distinguishing between the possible reasons for the increase in life-satisfaction. However, we argue that changes in work and work environment are not significant reasons for the increase in life-satisfaction. Earlier research (Ekberg et al. 2013, Tamm 2018) has shown that earmarked paternity leave has little impact on the labour supply of mothers, especially in the long run. Consistent with these studies, we find that work satisfaction and work-life balance are not impacted at all by eligibility for earmarked paternity leave. This holds for both fathers and mothers. 

While providing families with earmarked paternity leave does not seem to have much effect on mothers’ labour supply, and no effect on work satisfaction and work-life balance, this type of leave is still valuable. Parents report higher life satisfaction when they have been eligible to earmarked paternity leave, even more than a decade later. This implies that the implementation of the EU Directive on Work–Life Balance for Parents and Carers has the potential to improve life satisfaction in many EU countries. 

References

Almqvist, A and A Duvander (2014), “Changes in gender equality? Swedish fathers’ parental leave, division of childcare and housework”, Journal of Family Studies 20(1): 19–27.

Avdic, D and A Karimi (2018), “Modern family? Paternity leave and marital stability”, American Economic Journal: Applied Economics 10(4): 283-307.

Bünning, M (2015), “What happens after the ‘daddy months’? Fathers’ involvement in paid work, childcare, and housework after taking parental leave in Germany”, European Sociological Review 31(6): 738-748.

Druedahl, J, M Ejrnæs and T H Jørgensen (2019), “Earmarked paternity leave and the relative income within couples”, Economics Letters 180: 85-88.

Ekberg, J, R Eriksson and G Friebel (2013), “Parental leave—A policy evaluation of the Swedish “Daddy-Month” reform”, Journal of Public Economics 97: 131-143.

Fagan, C and H Norman (2016), “Which Fathers Are Involved in Caring for Pre-school Age Children in the United Kingdom? A Longitudinal Analysis of the Influence of Work Hours in Employment on Shared Childcare Arrangements in Couple Households”, in I Crespi and E Ruspini (eds), Balancing work and family in a changing society: the fathers’ perspective, Basingstoke: Palgrave Macmillan.

Farré, L and L González (2019), “Does paternity leave reduce fertility?”, Journal of Public Economics 172: 52-66. 

Kleven, H, C Landais and J Egholt Sogaard (2018), “Children and gender inequality: Evidence from Denmark”, VoxEU.org, 12 July.

Kleven, H, C Landais, J Posch, A Steinhauer J and Zweimuller (2019), “Child penalties across countries: Evidence and explanations”, VoxEU.org, 14 May. 

Kotsadam, A and H Finseraas (2011), “The state intervenes in the battle of the sexes: causal effects of paternity leave”, Social Science Research 40(6): 1611–1622. 

Kotsadam, A and H Finseraas (2013), “Causal Effects of Parental Leave on Adolescents’ Household Work”, Social Forces 92(1): 329–351. 

Norman, H, M Elliot and C Fagan (2014), “Which fathers are the most involved in taking care of their toddlers in the UK? An investigation of the predictors of paternal involvement”, Community, Work & Family 17(2): 163–180.

Olafsson, A and H Steingrimsdottir (2020), “How Does Daddy at Home Affect Marital Stability?”, The Economic Journal 130(629): 1471-1500.

Patnaik, A (2019), “Reserving time for daddy: The consequences of fathers’ quotas”, Journal of Labor Economics 37(4): 1009-1059.

Tamm, M (2018), “Fathers’ parental leave-taking, childcare involvement and labor market participation”, Labour Economics 59: 184-197.

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Topics:  Gender Labour markets

Tags:  family policy, labour market outcomes, gender inequality, wellbeing, parental leave, earmarked paternity leave

Program Specialist Social Protection, Swedish International Development Cooperation Agency (Sida)

Assistant Professor of Economics, Leiden University

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