Association for Public Policy Analysis & Management

The economic justification for paid parental leave is to address the significant gender gap
that exists in the labor force participation rate. For decades, the female labor force participation
rate in the United States has been significantly lower than their male counterparts. While the
United States has experienced a 5 percent decrease in the gender gap from 1990 to 2010, other
OECD (Organization for Economic Cooperation and Development) countries have experienced a
greater decrease in the gender gap, by as much as 14 percent. This stark difference between male
and female labor force participation in the United States can be attributed to the lack of friendly
work-family policies, including paid parental leave.

While some empirical research has suggested that paid parental leave, primarily
maternity leave, is associated with an increase in the female labor force participation rate, the
question that remains is whether paternity leave, along with maternity leave, would also improve
the female labor force participation rate. The purpose of this paper is to examine the effect of
maternity as well as paternity leave on the female labor force participation rate. This study
specifically examines data from OECD countries for the period of 1990 to 2016.

Based on the results, countries with paid parental leave, in general, have a significantly
higher female labor force participation rate than countries without paid parental leave. More
importantly, countries with both maternity and paternity leave have a significantly higher female
labor force participation rate than countries which only have maternity leave.