The Impact of Maternity Leave on Female Labor Market Performance: A case study of Switzerland's policy change

Abstract

This paper takes the Switzerland's maternity leave policy change in 2006 as an example to examine the impact of maternity leave length on female labor market performance. To accurately identify the effect of the policy change on labor market performance of females, three dimensions of the labor market are being focused on; namely, gender discrimination, female workers` willingness to work and employment opportunities; as measured with the gender wage gap, the labor force participation rate, the employment-to-population ratio and the unemployment rate. Statistical results of the study, in which Switzerland is taken as experimental group while control group is composed of culturally, geographically and economically similar countries and in which the difference-in-difference (DD) framework along with individual fixed effects in the first stage and the difference-in-difference-in-difference method (DDD) are utilized, demonstrate that increased maternity length leave had negative impact on female workers` willingness to work and reduced their employment opportunities while not significantly changing the gender discrimination. Keywords—maternity leave, female employment