“Competition, Paternity Leave and Career Advancement” by Dr. Hyejin Ku
Dr. Hyejin Ku
University College London
Workers often fear that taking leave may harm their career progression and future earnings, despite their entitlement to a variety of statutory leave policies and job protections. In this paper, we ask whether and why such concerns may be justified, focusing on two main reasons: loss of human capital (direct effect) and losing out against non-taking co-workers (competition effect). By exploiting a policy reform that exogenously assigned new fathers to four weeks of paternity leave based on child birth dates, we find a strong support for the competition effect but not the direct effect. When a larger share of one’s competitors are induced to take leave, own earnings are put on a better trajectory than otherwise after child birth. The competition effect we uncover suggests a possible role of mandated paternity leave in narrowing the male-female earnings gap post-child births.