Paid Parental Leave and Female Labor-Force Participation: Evidence from the OECD
DOI:
https://doi.org/10.54097/xfxnmr54Keywords:
Paid parental leave, Female labor-force participation, OECD countries, Childcare policy.Abstract
We study whether paid maternity/parental-leave entitlements shape female labor-force participation (LFPR) across OECD countries. Combining OECD PF2_5 leave entitlements with World Bank LFPR, fertility, and GDP per capita for 1970–2023, we estimate country- and yearfixed-effects models and examine dynamics and event-study plots around major reforms. On average, an additional ten fully-paid-equivalent weeks is associated with a 0.16 percentagepoint change in LFPR (small), while dynamic specifications show no sustained post-reform gain within three years but a positive “lead” effect consistent with anticipation. Event studies reveal heterogeneous paths—e.g., Estonia’s LFPR rises after trimming ultra-long home-care leave, while Hungary’s increase coincides with expanded childcare support, and Sweden’s father quota mainly reallocates leave without raising LFPR. Results suggest that policy bundles—moderate leave paired with affordable childcare—are more effective than extending very long home-care leave.
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