Mothers’ labour market transitions in Spain: the role of part-time parental leave

Irene Lapuerta, Universidad Pública de Navarra

This paper examines the labour market transitions mothers make in Spain after having their first child, with special attention paid to the part-time parental leave (also known as ‘reduced working hours’). Until now, most studies have largely neglected this option, and those that do include part-time parental leave, have not usually distinguished it from part-time work. This results in a lack of knowledge about the causal mechanisms behind mothers’ labour decisions and, even more seriously, the confounding of two choices with very different constraints, especially in Southern Europe where part-time jobs have very poor protection, social benefits and earnings. This paper attempts to clarify these issues. I use a competing risks event history analysis to investigate the likelihood of mothers, who are employed full-time at the birth of their first child, to transition thereafter to any of the following destination states: 1) part-time parental leave; 2) full-time parental leave; 3) part-time work; or 4) inactivity or unemployment. The analysis is based on a subsample of 16.902 women from the ‘Muestra Continua de Vidas Laborales’ (waves 2005-2008). The results show support for the opportunity cost hypothesis for high-wage earners but, contrary to initial expectations, do not show a lower opportunity cost associated to transitions to part-time parental leave in comparison to full-time parental leave. Only those mothers with middle-range wages, very high job security and working in the private sector have part-time parental leave as a real labour market alternative, while those in more vulnerable positions in the labour market appear to be pressured into part-time work or, more frequently, withdraw from the labour market altogether.