Skip to main content

Who benefits from paid family leave? Impact of expansions in Canadian paid family leave on maternal employment and transfer income


This paper estimates the impact of a recent expansion in Canadian paid family leave from 25 to 50 weeks on maternal employment and transfer income. It finds the expansion coincided with increases in transfers to mothers of children age zero to one relative to mothers of children age three to four, and with decreases in returns to work in the year after birth. These changes were concentrated among economically advantaged groups of women, defined by marital status, education, and non-wage income. Despite these changes, there was no evidence of a decrease in returns to work or relative employment for mothers of children age one.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2


  1. On average, social assistance phased out at $9,600 of unearned income for a single parent with one child and $12,000 for a two parent family with two children. The federal child tax credit consists of two parts: a supplemental benefit that phased out from $22,000 to $33,000 and a basic benefit that phased out from $33,000 to $77,000. Most provincial child allowances phased out from $21,000 to $25,000 (Jenson 2003; National Council of Welfare 2002).

  2. Schönberg and Ludstec (2007) found that when German paid leave expanded from 6 to 10 months, the share of women returning to work by month 7 decreased by 25 to 26 percentage points (56–58%). In Austria, Lalive and Zweimüller (2005) found that expansions from 12 to 24 months led to approximately a 23 percentage point (55%) decrease in the returns to work in month 12. Estimates from Austrian study based on author estimates from Fig. 7 of paper.

  3. Unfortunately, most current comparative research on child and family benefit packages such as OECD (2006) and Bradshaw and Mayhew (2006) do not explicitly address interactions with family leave payments (Kershaw 2007). However, the OECD (2006) study indicated that eight countries (Austria, Germany, Iceland, Ireland, Luxembourg, Netherlands, Spain, and the UK) explicitly disregard child benefits and family allowances in determining social assistance and means-tested housing benefits, while four other countries (Finland, Norway, Denmark, and Sweden) did not do so. Other countries, such as France, exempted the first 4 months, and not the remaining 28 months of their “young child allowance”, from income under their guaranteed minimum income program.


  • Allison PD (1995) Survival analysis using SAS: a practical guide. SAS Institute, Cary

    Google Scholar 

  • Baker M, Milligan K (2005) How does job-protected leave affect mothers’ employment and infant health? National Bureau of Economic Research Working Paper 11135

  • Baker M, Gruber J, Milligan K (2005) Universal childcare, maternal labor supply and family well-being. National Bureau of Economic Research Working Paper 11832

  • Baum CL (2003a) The effects of maternity leave legislation on mothers’ labor supply after childbirth. South Econ J 69(4):772–799

    Article  Google Scholar 

  • Baum CL (2003b) The effects of state maternity leave legislation and the 1993 Family and Medical Leave Act on employment and wages. Labour Econ 10(5):573–579

    Article  Google Scholar 

  • Bradshaw J, Mayhew E (2006) Family benefit packages. In: Bradshaw J, Hatland A (eds) Social policy, employment and family change in comparative perspective. Edward Elgar, Cheltenham, UK

  • Canada Employment Insurance Commission (2004) Employment insurance 2003 monitoring and assessment report. Human resources and social development Canada catalogue number SK-SP-102-04-04E

  • Canada Federal–Provincial–Territorial Directors of Income Support (2005) Social assistance statistical report: 2004. Social development Canada catalogue number SP-626-09-05E.

  • Canadian Legal Information Institute (2007) Consolidated statutes of Quebec, family Benefits, an act respecting R.S.Q. c. P-19.1, Version Downloaded by CanLII on 2007-03-07.

  • Cheal D, Kampen K (2000) EI family supplement & relative earnings for families with children. Human resources and social development Canada catalogue number SP-AH134-11-00E

  • Government of Canada (1999) Employment insurance act: regulations amending the employment insurance regulations. Canada Gazette 133(14)

  • Han WJ, Waldfogel J (2003) Parental leave: the impact of recent legislation on parents’ leave taking. Demography 40(1):191–200

    Article  Google Scholar 

  • Jenson J (2003) Redesigning the “welfare mix” for families: policy challenges. Canadian Policy Research Networks Discussion Paper F-30

  • Kershaw P (2007) Measuring up: family benefits in British Columbia and Alberta in international perspective. IRPP Choices 13(2)

  • Klerman JA, Leibowitz A (1997) Labor supply effects of state maternity leave legislation. In: Blau F, Ehrenberg R (eds) Gender and family issues in the workplace. Russell Sage, New York, pp 65–85

    Google Scholar 

  • Klerman JA, Leibowitz A (1999) Job continuity among new mothers. Demography 36(2):145–155

    Google Scholar 

  • Lalive R, Zweimüller J (2005) Does parental leave affect fertility and return-to-work? Evidence from a ‘true natural experiment’. IZA Discussion Paper 1613

  • National Council of Welfare (2002) Welfare incomes 2000 and 2001. Minister of Public Works and Government Services Canada, Ottawa

  • National Council of Welfare (2005) Welfare incomes 2004. Minister of Public Works and Government Services Canada, Ottawa

  • Ondrich J, Spiess CK, Yang Q, Wagner GG (2003) The liberalization of maternity leave policy and the return to work after childbirth in Germany. Rev Econ Household 1(1–2):77–110

    Article  Google Scholar 

  • Organization for Economic Co-operation and Development (2006) Benefits and wages: gross/net replacement rates country specific files and tax benefit models (latest update: March 2006). OECD Social Policy Division, Paris.,3343,en_2649_34637_34053248_1_1_1_1,00.html

  • Ronsen M, Sundstrom M (2002) Family policy and after-birth employment among new mothers: a comparison of Finland, Norway and Sweden. Eur J Popul 18(2):121–152

    Google Scholar 

  • Ruhm CJ (1998) The consequences of parental leave mandates: lessons from Europe. Q J Econ 113(1):285–318

    Article  Google Scholar 

  • Schönberg U, Ludstec J (2007) Maternity leave legislation, female labor supply, and the family wage gap. IZA Discussion Paper 2699

  • Sigle-Rushton W, Waldfogel J (2007) Motherhood and women’s earnings in Anglo-American, continental European, and Nordic countries. Fem Econ 13(2):55–91

    Article  Google Scholar 

  • Statistics Canada (2003) Topic based tabulations for 2001 census: earnings of Canadians Table 23, catalogue no. 97F0019XCB2001044.

  • Waldfogel J (1999) The impact of the Family and Medical Leave Act. J Policy Anal Manage 18(2):281–302

    Article  Google Scholar 

Download references


Please send correspondence to Maria Hanratty. This paper was supported by a grant from the Canadian Embassy and the Statistics Canada Microdata Research Data Center Program. The research and analysis are based on data from Statistics Canada and the opinions expressed do not represent the views of Statistics Canada. The authors would like to thank three anonymous referees for their helpful comments and suggestions.

Author information

Authors and Affiliations


Corresponding author

Correspondence to Maria Hanratty.

Additional information

Responsible editor: Deborah Cobb-Clark



Fig. 3
figure 3

NLSCY sample design, time-to-work analysis

Table 5 Proportional hazard model for months until mother returns to work, economic and demographic controls
Table 6 Proportional hazard model for months until mother returns to work: baseline hazard parameters

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Hanratty, M., Trzcinski, E. Who benefits from paid family leave? Impact of expansions in Canadian paid family leave on maternal employment and transfer income. J Popul Econ 22, 693–711 (2009).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:


  • Canada
  • Family leave

JEL Classification

  • J160
  • J180
  • J220