Income Loss and Leave Taking: Increased Financial Benefits and Fathers’ Parental Leave Use in Sweden

Abstract

A major reason for the gendered division of parental leave use is the financial compensation during leave. Swedish national parental leave benefit provides 77.6 percent of earlier earnings up to an income ceiling, but collective agreements cover part of the income loss above the ceiling during leave. We focus on the importance of such collective agreements by examining fathers’ parental leave take-up across the 2000s, as agreements were expanded during this period in time. We combine register data for the period 2001 to 2011 with the Longitudinal Integrated Database for Health Insurance and Labour Market Studies (LISA) being the key data source. The main division of agreements is between the state, the municipality and county, and the private sector. Results indicate that fathers with income above the income ceiling increase their use over the time period. Especially in the private sector a polarisation can be seen, where high income fathers increase their leave use, while fathers with lower income fall behind. As we do not find stronger increase in fathers’ leave use in sectors where agreements expanded across time there is no evident support of a direct effect of the top-ups.