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Paid Parental Leave Duration, Number of Children, and Income Growth: A Longitudinal Analysis

Sat, August 11, 8:30 to 10:10am, Philadelphia Marriott Downtown, Floor: Level 4, Franklin Hall 4

Abstract

There is a growing awareness in the literature that work-family policies, while allowing employees to better balance work and life outside work, may also result in penalties, or lower rewards for employees who use such policies. In this paper we explore this proposition by examining the effect of paid parental leave use on salary growth of men and women after the birth of their first and second child. In addition, we explore whether the age gap between the first and second child is related to salary growth over time. Using the commitment hypothesis model and the ideal workers norms framework, we hypothesize that parents will be penalized for having children, that they will be further penalized for using paid parental leave, and that men will be penalized more for taking leave. We use the National Longitudinal Surveys of Youth for 1979 and 1997 to test our hypotheses with a sample of individuals who worked continuously (returned to work after taking their paid leave). We find that both men and women are penalized in term of their salary growth for having their first child, but only women are penalized for having a second child. Further, we find that taking parental leave results in a significant reduction in the slope of wage growth and that it takes women five to seven years to catch up with the salary growth of employees who did not take parental leave, while for men it takes almost 12 years to catch up. Age gap between children is not significantly related to salary growth. We conclude with implication to theory and future research.

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