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Seoul Journal of Economics - Vol. 33 , No. 2
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Seoul Journal of Economics - Vol. 33, No. 2, pp. 121-161
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 30 May 2020
Received 06 Apr 2020 Accepted 17 Apr 2020
DOI: https://doi.org/10.22905/sje2020.33.2.002

Duration of Parental Leave and Women’s Employment
Jungho Kim
Jungho Kim, Associate Professor, Department of Economics, Ajou University & IZA, 206 Worldcup-ro, Yeongtong-gu, Suwon, 16499, South Korea, Tel: +82-31-219-2739, Fax: +82-31-219-2195 (jungho@ajou.ac.kr)

Funding Information ▼

JEL Classification: J13, J18, J22

Abstract

The study examines the consequence of the extension of maximum job-protected and paid leave from 12 months to 15 months in Korea. The analysis, based on regression discontinuity design, finds the reform led to more female employees taking leave and for longer periods. The take-up of leave increased by five percentage points and the duration by 40 days. The probability of returning to work within three years after birth increased by two percentage points after the policy change, but the effect diminished by four years after birth. No significant impact on their return to their pre-birth job is found. This finding implies that a relatively small change in parental leave legislation may promote women’s employment in the short-term. Moreover, the extension of the maximum duration of job-protected leave is not enough to support women’s career development in the long-term. Finally, the short-term impact on women’s employment was the largest for those with the lowest wage and in the smallest firms. Although the evidence is not definitive, the heterogeneous effect needs to be paid further attention in evaluating parental leave policy.

Keywords: Parental leave, Female labor supply, Timing of childbearing, Natural experiment
Acknowledgments

This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2017S1A3A2066494). This work was also supported by the Ajou University research fund.

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