Can paternity leave benefit working women in developing countries?

In recent years, a spate of articles came out proclaiming the benefits of paternity leave. One article by the New York Times cited a study in Sweden that stated that mother’s future earnings increased on an average of 7 percent for every month of leave the father took. The same article cited another study in the U.S. that attributed tighter bonds between fathers and children to paternity leave. One striking common feature in all of these articles is an overwhelming focus on developed economies, mainly the U.S. and Scandinavian countries.  This prompted us to ask the next question: how about paternity leave in developing countries?
 
In a recent study, my co-authors and I attempted to uncover the role of paternity leave on women's employment in developing economies (forthcoming Applied Economics Letters). We combined the World Bank Enterprise Surveys’ firm level data on the proportion of women employed in the private sector and the paternity leave data from the World Bank's Women, Business and the Law. Our sample of the study consisted of 53 developing countries, where Pakistan had the lowest proportion of women workers over total workers with 3 percent and Belarus had the highest with 51 percent. 22 countries in our sample mandated paternity leave, while 31 countries did not.  We also accounted for a number of factors, including firm characteristics (size, age, sector), level of economic development, education, religion, women in parliament, and the presence of women managers and owners.
 
We found a significant substantial positive relationship between the presence of mandated paternity leave in an economy and the share of women workers in a firm. Mandating paternity leave is associated with a 6.8 to 7.4 percentage point increase in the share of women workers in a typical firm, depending on the factors accounted for. In addition, we also found that women’s employment is higher in firms where women were owners or occupied top managerial positions. As shown in the figure below, firms in countries that mandated paternity leave had an average of 35 percent women employees, while firm in countries did not had an average of 28 percent women workers.
 

What could explain the positive relationship between paternity leave and women employment? First, mandated paternity leave could change the attitudes of employers. Consider for instance positions that require a lot of investment on employees such as job training. Employers may not hire women anticipating frequent absence due to child birth and child rearing activities, and thus a subpar return on their investment. However, if paternity leave allows men to spend more time outside work, assuming considerable uptake of paternity leave, this may limit employer’s discrimination against women’s recruitment. Second, how men and women allocate their time at home will determine the amount of time spent at work. If men spent more time after childbirth on household or childcare chores, this could lead to an allocation of time in the household where women would spend more time in formal employment. These two possibilities would apply for all countries, regardless of level of development.
 
Our results present important evidence in an under-researched area, but many questions still remain unanswered. For instance, does the effect of paternity leave on women's employment vary by the type of job? What conditions lead to a mandate of paternity leave in some developing economies, but not others? Finally, does the length of paternity leave matter for women’s employment? We hope to find the answers to these questions soon.