The Cost of Raising Fertility: High Maternity Benefits and Lower Occupational Mobility Among Denmark's Mothers

In recent years, Europe has entered a crisis of fertility. One policy solution that countries can, and some have moved to adopt to deal with low fertility rates, is to increase labor benefits granted to new parents, with a particular focus on extending maternity, not paternity, leave. We explore the extent to which maternity benefits may have positive externalities for employers, such as increased employee loyalty. Relying on population wide registry data, we carry out multiple group comparisons (e.g. by comparing women who gave birth with those who adopted children, women with children that require more or less in-home care, etc.). We test the extent to which reduced occupational mobility for women with children is a result of an increased sense of loyalty that may accompany generous maternity leave benefits. We also analyze whether employee loyalty brought on by maternity benefits are influenced by the gender or ethnicity of the employee.  Maternity benefits may inadvertently reduce occupational mobility of mothers, as opposed to fathers. Decreased mobility may relate to inequalities tied to in-home labor, which can be magnified by increased maternity leave, rather than employee loyalty. Thus, though supporting an increase in Europe’s fertility rate, increasing maternity leave may also exacerbate gender inequalities tied to childrearing. Relying on alternative measures of in-home gender inequalities (e.g. gender conservatism), initial results provide compelling evidence that maternity benefits do affect employee mobility and that this association is contingent on the inequalities between mothers and fathers.