Essays on parental leave and family labour supply
Authors: Youjin Choi
This thesis studies married couples’ decisions regarding labour supply, fertility, and take-up of parental leave. Importantly, it emphasizes household interactions in a family labour supply framework where husbands and wives jointly make decisions. In Chapter 2, I describe how differences in married individuals’ time allocations between Canada and the U.S. may be related to different parental leave policies in the two countries. First, I document background information on parental leave policies and take-up behaviour in the two countries. Second, I analyze married individuals’ time allocations using data from the General Social Survey (GSS) for Canada and American Time Use Survey (ATUS) for the U.S. I examine the role of having children on their parents’ time allocations across market work, child care, household chores, and leisure and make cross-country comparisons. In Chapter 3, I investigate the effects of maternity leave policies on married couples’ fertility and employment decisions. I develop and characterize a unique household search model that features home production and endogenous fertility choice. I characterize reservation rules in the household search model and find that this model can generate patterns that cannot be generated by an individual search model. In particular, I parameterize a benchmark model that provides 12 weeks of unpaid leave as in the U.S. I use a parameterized model to examine the impact of an extended paid maternity leave policy on fertility rates and household employment. I find that a longer paid maternity leave increases fertility rates, lowers fraction of dual-earner couples, and increases the fraction of single-earner couples. In Chapter 4, I examine what prevents married fathers from taking parental leave despite its availability in Canada. As possible explanations, I consider gender differences in rental rates of human capital, wage growth processes, wage penalties for time off from work, preferences for leisure, and productivity in home production. I document supporting empirical evidence for the possible explanations. Next, I develop a life-cycle model of family labour supply that features learning-by-doing human capital accumulation and time allocations across market work, leisure, and home production. Then, I quantify the relative importance of these explanations within the model. I find that lower home productivity in the presence of an infant, higher rental rates of human capital, and higher wage penalties for not working for fathers are the main contributors to the low take-up of fathers. Finally, I conduct policy experiments to highlight the role of cash benefits and paternity leave on fathers’ take-up of leave. The results show that fathers’ take-up rates are responsive to an increase in an income replacement rate combined with the introduction of paternity leave.
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