Employment Protection and Parental Child Care

36 Pages Posted: 15 Jul 2014

See all articles by Martin Olsson

Martin Olsson

Research Institute of Industrial Economics (IFN)

Date Written: January 28, 2013

Abstract

I examine if employment protection affects parental childcare. I find that a softer employment protection has a substantial effect on how parents use and divide paid childcare between them. The identification relies on a reform that made it easier for employers in Sweden to dismiss workers in small firms. I estimate that a softer employment protection reduces the total days of parental childcare in targeted firms, measured as total days of parental leave or temporary parental leave. Both a sorting effect and a behavioral effect can explain the reduced childcare. I also find evidence of a redistribution effect of paid parental childcare within households if only one partner was affected by the reform. I interpret the redistribution effect as a way of evading an external cost on the child.

Keywords: employment protection, parental childcare, within family distribution

JEL Classification: J13, K13

Suggested Citation

Olsson, Martin, Employment Protection and Parental Child Care (January 28, 2013). Available at SSRN: https://ssrn.com/abstract=2466279 or http://dx.doi.org/10.2139/ssrn.2466279

Martin Olsson (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

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