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‘Can’t Have It All’: A Longitudinal Analysis of the Effect of Parental Leave on Early-Career Wage Growth

Work-family policies (WFPs) are a result of policymakers’ efforts to effectively support labor force participants work and family domains. Often, users of WFPs experience penalties or lower organizational rewards, which inhibits the effect of WFPs. To further study this, we examine the long-term effects of unpaid and paid parental leave on wage growth. Based on the ideal worker norm framework and signaling theory, we hypothesize that using paid/unpaid parental leave will result in lower wage growth over time, above and beyond the negative effect of having children. We further hypothesize that men will be penalized more than women for using parental leave. To test our hypotheses, we use the 1997 National Longitudinal Surveys of Youth with a sample of individuals who worked before and after taking parental leave. We find that, for both women and men, having children is associated with lower wage growth over time. Supporting our hypotheses, we find that women are penalized more than men for having children, while men are penalized more for using parental leave.