Kolloquium: Paternity Leave and Statistical Discrimination: Evidence from Spanish Firms

Abstract: 
Gender gaps in labor market outcomes remain a persistent feature of modern economies. Statistical discrimination, driven by employers' expectations about gender-specific labor supply patterns (e.g., related to childcare responsibilities), may contribute to these disparities. We investigate whether the recent extensions of paternity leave in Spain, which equalized parental leave entitlements for mothers and fathers, reduced statistical discrimination against women in firms. If employers anticipate that women will take disproportionately more time off for childcare, they may discriminate against them in hiring, promotion, or pay. By increasing fathers' leave, such reforms could reduce this gap in expected parental leave take-up, thereby alleviating statistical discrimination. We exploit three recent reforms in a regression discontinuity design around the birth date of children, using a unique administrative dataset of Spanish firms and their employees. Our findings reveal no statistically significant effects of increased paternity leave exposure on firms' subsequent hiring or firing of women, or the within-firm gender gap in earnings, in the three years following exposure. This suggests that, while paternity leave extensions may be important for promoting gender equality in caregiving, their impact on firm-level statistical discrimination in the labor market may be limited, at least in the short to medium term.