Paternity leave and labor market outcomes.

Abstract

This paper studies the impact of a paternity leave provision on the labor market outcomes of parents. We exploit the 2002 French reform which entitled fathers to eleven consecutive days of leave. Prior to that, fathers were only entitled to three days as agreed upon by the Code of Work. Using a regression discontinuity design, we find a negative impact on fathers’ earnings. The effect is highly significant and robust. On average, employed fathers experience a 3.3 percent decrease in their earnings as a result of the paternity leave. The effect is heterogeneous; our findings suggest that more educated fathers experience a larger decrease in their earnings relative to less educated fathers. Moreover, there is some evidence of an increase in the employment (versus unemployment) of fathers and this increase is mainly captured for the sample of less educated fathers.