Making Leave Easier: Better Compensation and Daddy-Only Entitlements∗

In 2006, Quebec enacted a landmark reform to paid parental leave that greatly improved the generosity of entitlements and established a father’s non-transferable right to paid leave. Using data from the Employment Insurance Coverage Survey and employing a difference-in-differences setup, I find that the reform was associated with a striking rise in fathers participation: an increase of 59 percentage points in the probability of a father receiving parental leave benefits. Further, there is evidence of an intrahousehold flypaper effect via the labeling of leave as ’daddy-only’, i.e., the allocation of leave within a household appears to be influenced by the framing of legal rights even when they do not bind. In the case of mothers, the reform was associated with an increase of 14 percentage points in claim rates. The duration of the average maternity leave increased by over half a month under the new program. I find no change in mothers exit rates from the labor market on average but do find the reform to be associated with an increase in the probability of returning to the pre-birth employer, especially for first-time mothers. JEL Classiffication: J13, J22, J16, J18, J53, I38 ∗Working Paper: Please do not cite or distribute without author’s permission. This analysis is based on the Statistics Canada Employment Insurance Coverage Survey, (20012011). All computations, use and interpretation of these data are entirely that of the author. †I would like to thank Francine D. Blau and John M. Abowd and Michael F. Lovenheim for their invaluable feedback and advice. In addition, this project was supported by grants from the L.R. Wilson Fund, Benjamin Miller Fellowship, Mario Einaudi Center for International Studies, Center for the Study of Inequality, and Cornell University Graduate School.