The effect of parental leave duration on early‐career wage growth

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Why is it important?

This study makes several important contributions. 1. We show that having children and parental leave have a distinct effect with different consequences for women and men and suggest that it is important to differentiate the effect of children from the effect of family policy use on career outcomes. 2. We show that the effect of parental leave depends on the type of leave taken paid parental leave (if available to them) is penalized more than employees who use unpaid parental leave. 3. We find that the length of paid parental leave taken is also a significant factor, longer leave has a more detrimental impact on future wage growth than shorter leaves 4. Paid parental leave, which is mostly available to skill, professional employees carry a noticeable early-career wage penalty, but the use of unpaid leave, does not, both men and women are penalized for taking parental leave, but the longer parental leaves women take increase the gender pay gap 5. Our paper contributes to the growing literature that shows that father’s involvement in their children's life is constrained not only by self-inflicted social norms but also by external constraints and penalties, for men who take parental leave, even if only a few days