The effect of increased unemployment on parental leave uptake – Evidence from the financial crisis

Gender differences in parental leave uptake are a key factor contributing to the persistent wage gap between men and women. While men’s uptake has gradually increased since the introduction of parental leave benefits in Sweden, recent progress has slowed and disparities remain. This study analyzes how rising unemployment, both actual and perceived, affects parental leave uptake. Given that men are more likely to work in cyclical sectors and may face greater workplace pressure during economic uncertainty, a decrease in uptake is expected. The effect on women, however, is unclear, potentially shaped by the social acceptance of maternity leave and potential wage penalties. Using Swedish municipality-level data from 2004 to 2011, I exploit regional variation in unemployment changes during the financial crisis. A difference-in-differences (DD) approach is utilized to compare changes in parental leave uptake between more and less affected municipalities. The results suggest a modest positive effect on men’s uptake, contrary to the initial expectation of a decrease. However, the findings should be interpreted with caution due to data limitations.