Parental leave negatively affects career prospects of women

A new report being published today on IZA World of Labor shows evidence for career costs related to parental leave, which vary by educational level and increase according to the length of leave

In many countries, women with children fall behind comparable men in terms of career prospects and wages. Globally, women are still performing worse than men on the “career ladder.” Quite pronounced is the underrepresentation of women in CEO positions throughout most countries. But this phenomenon is also seen in higher- and medium-level management positions as well as top academic positions.

Economist Astrid Kunze of the Norwegian School of Economics shows that part of the reason for this achievement gap is that a large proportion of women do not return to work soon after childbirth.

While parental leave schemes provide policy options to increase maternal employment, Kunze cites the latest research indicating that a prolonged leave period negatively affects employment rates and wages. An explanation for this seems to be that longer career interruptions due to parental leave can lead to detachment from work and human capital depreciation. This seems particularly true in the case of highly educated workers and those in jobs that are faced with rapid technological change.

There is also evidence of discrimination against women and mothers which makes it harder for them to return to work after childbirth. Kunze cites one experiment which involved sending (written) resumes that were identical except for the applicant’s gender or motherhood status to real job openings by employers. The evidence suggests that significant discrimination against women exists, especially in high-status or male-dominated professions.

International experience, mainly from Europe, shows positive experiences with short and medium leave periods. Nevertheless, there are career costs related to parental leave. As such, Kunze suggests, governments should take notice of workers’ career costs. Public policy and firm-based practices such as return-to-work mentoring programs should be established in order to reduce the costs associated with periods of leave and to provide incentives to return to work early.

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Please contact Anna von Hahn for more information or for author interviews: anna.vonhahn@bloomsbury.com or +44 7852 882 770

Notes for editors:

• IZA World of Labor (http://wol.iza.org) is a global, freely available online resource that provides policy makers, academics, journalists, and researchers, with clear, concise and evidence-based knowledge on labor economics issues worldwide.
• The site offers relevant and succinct information on topics including diversity, migration, minimum wage, youth unemployment, employment protection, development, education, gender balance, labor mobility and flexibility among others.
• Established in 1998, the Institute for the Study of Labor (www.iza.org) is an independent economic research institute focused on the analysis of global labour markets. Based in Bonn, it operates an international network of about 1,300 economists and researchers spanning more than 45 countries.