Side Effects: Unintended Consequences of Family Leave Policies

The transition to parenthood is a major life event and a critical juncture in terms of gender equality within a couple. How a couple divides paid and unpaid work following the birth of a child has long lasting consequences for their relationship, their economic situation and their children’s development. Family policy plays a crucial part in this process. Today, job protected family leaves – maternity-, paternity-, parental- and/or childcare leave – are available across most developed countries to support parents in combining work and family and to enhance gender equality. However, there exists large variation in provision and leave lengths across countries, as well as disparities in take-up within countries. Further, different types of family leaves share different aims that may be contradictory. Whether family leaves achieve their stated objectives, or whether they produce unintended consequences or ‘side effects’ is an important part of policy research. This dissertation consists of an introductory chapter, followed by four empirical studies which analyse the consequences of family leave. The dissertation departs from a comparative study, before the case of Finland is investigated in the remaining three studies. Two main questions are addressed throughout this dissertation. First, do family leave policies have unintended consequences in terms of labour market and family outcomes? Second, are individuals with specific characteristics disproportionately advantaged or disadvantaged by family leave? Comparing 20 countries, Study I analyses the association between paid family leave length and mother’s labour force status. Existing research has yet to distinguish between the non-employment categories: unemployed and inactive. Results point towards a trade-off where longer leaves are associated with higher unemployment risks, while shorter leaves are associated with higher inactivity among mothers. Study II investigates whether single mothers are disproportionately disadvantaged by longer family leave compared to partnered mothers in Finland. This study finds heterogeneous leave consequences in terms of unemployment risks to single mothers’ detriment, which are not merely due to selection, but potentially due to discrimination or work-family reconciliation problems. No differences in earnings consequences were found for partnered and single mothers, however, conditional on being employed. Turning to fathers, Study III examines whether fathers’ fears of economic penalties when taking leave are justified. Assessing penalties across fathers’ wage distribution, this study finds that only fathers at the lower end of the distribution face wage penalties, while fathers at the upper end of the distribution show wage premiums. The study concludes that even some progressive policies fail to address the disproportional penalties among the least-advantaged fathers. Study IV turns to family outcomes and examines whether childcare leave affects family stability in the short and long run. Results suggest lower union dissolution risks during take-up but not thereafter, and indicate that the temporary gendered division of labour and income loss of mothers may lead to postponement of separation. Family leave policies are an important part of gender egalitarian policy schemes with great advantages. Nevertheless, this dissertation shows that family leave policies may have unintended consequences. Family leave can affect family stability temporarily, while lengthy family leaves lead to negative labour market effects for both men and women and can reproduce social inequality. Unintended consequences and disproportional disadvantages need to be evaluated in order to develop more universal and socially just forms of family leave