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study, the OECD (2007) found no significant effect of maternity leave policies on female wages. Ruhm’s (1998) study of 9 European countries concluded that the leave and wage relationship was non-linear, with leaves of 3 months or less having no effect while leaves of 9 months or more were associated with wage declines.

One concern with mandated benefits is that they may have unintended negative consequences for classes of workers covered by the policy. Does this apply to parental leave which still disproportionately covers women? Mandel and Semyonov (2005), analyzing 20 upper-income countries, concluded that maternity leave exacerbated the male-female wage differential because of longer non-employment periods for women and because of employers practising statistical discrimination. In a developing country context, Gindling and Crummett (1997) found that relative wages for women declined after an extension of maternity leave rights in Costa Rica. However, not all researchers find these unintended effects (e.g., Korpi, Ferrarini, and Englund 2009).

# **_6.2  Impacts on productivity_**

The OECD (2007) has summarized the different ways in which parental leave and care-giving leave programs might affect productivity. Positive impacts include improved morale and work commitment and, because of longer tenure, greater firm-specific human capital and investments in training on the part of both firms and workers. On the other hand, these policies could hinder productivity if the leave provisions reduce working time and incentives in invest in human capital or if they lead to inefficient or discriminatory hiring where employers do not hire qualified women or employ them in lower-skilled jobs than they are capable of filling.

Studies on the productivity effects of leave policies are often based on subjective perceptions of managers. According to the OECD (2007), the results are “mixed and difficult to generalise” (p. 79). The OECD’s own analysis, based on quantitative data from 18 countries, finds that parental leave policies are associated with higher productivity levels. An additional week of unpaid leave results in a very small (between 0.005 and 0.01 percentage points) but statistically significant increase in both labor and total factor productivity levels. The effect is larger in the case of paid leave, but it is only statistically significant in the case of TFP. For example, if a country without paid parental leave introduced a policy of 15 weeks of paid leave (the OECD average), the study estimates that the long-run effect would be an increase in the total factor productivity level of 1.1% (OECD 2007; Bassanini and Venn 2007). It is not clear, however, whether the productivity gains from leave programs fully compensate for higher associated costs. An analysis in the U.K. also finds positive productivity effects associated with paid leave programs; however, the authors cannot determine whether paid leave policies are a cause or consequence of superior performance (Riley _et al._ 2008).

# **_6.3  Impacts on social cohesion_**

Family-related leave policies can exert some effect on various dimensions of social cohesion. The most obvious concerns the ability to balance work and family formation. Parental leave programs, especially those that provide for some wage replacement, are associated with higher employment rates for women of child-bearing years. At the same time, Gornick and Hegewisch (2010) conclude that fertility rates are higher where women are able to combine employment and