Who Benefits from a Maternity Leave Extension? Evidence from Chile (draft upon request)
This paper studies the short- and medium-term effects of extending parental leave on women’s labor market outcomes. I exploit a reform implemented in Chile in 2011 that extended women’s parental leave from 12 to 24 weeks (84 to 168 days). I combine administrative data on leave claims with employer-employee data to estimate the effect of a longer leave on women’s wages and employment five years after childbirth. On average, women exposed to the reform extend parental leave in 81 days, they do not experience negative impacts on employment or formal wages, and have lower separation rates for at least three years after childbirth. These results hinder ample heterogeneity by workers’ education. College and high-school graduates are more likely to remain employed, but women with less than high school reduce their formal employment right after the end of the leave, even when they are protected by law. These results are mainly driven by older and married women. I use survey data to explore employment trajectories outside the formal sector and find that low-educated workers are more likely to transition to informality.
Work in Progress