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Anti-discrimination legislation and the efficiency-enhancing role of mandatory parental leave
Linnaeus University, School of Business and Economics, Department of Economics and Statistics. CESifo, Germany. (Linnaeus University Centre for Labor Market and Discrimination Studies)
Ben Gurion University, Israel ; CESifo, Germany.
University of Milan, Italy ; Bocconi University, Italy ; CESifo, Germany.
2016 (English)Report (Other academic)
Abstract [en]

We study a setting where anti-discrimination legislation gives rise to adverse selection in the labor market. Firms rely on nonlinear compensation contracts to screen workers who differ in their family/career orientation. This results in a labormarket equilibrium where career-oriented workers are offered an inefficiently low duration of parental leave. In addition, family-oriented workers are offered lower wages as compared to their equally skilled career-oriented counterparts. We demonstrate the usefulness of mandatory parental leave rules in mitigating the distortion in the labor market and derive conditions under which a Pareto improvement is possible. We also characterize the optimal parental leave policy and highlight the possibility for parental leave legislation to eliminate the wage penalty of family-oriented workers by supporting pooling employment contracts.

Place, publisher, year, edition, pages
Linnaeus University Centre for Labour Market and Discrimination Studies , 2016. , p. 44
Series
Working paper series: Linnaeus University Centre for Labour Market and Discrimination Studies ; 2016:3
Keywords [en]
Anti-discrimination, Adverse selection, Parental leave, Efficiency
National Category
Economics
Research subject
Economy, Economics
Identifiers
URN: urn:nbn:se:lnu:diva-70366OAI: oai:DiVA.org:lnu-70366DiVA, id: diva2:1179396
Available from: 2018-02-01 Created: 2018-02-01 Last updated: 2018-02-01Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf