Labour Supply and Incentives to Work in Europe

Labour Supply and Incentives to Work in Europe

Edited by Ramón Gómez-Salvador, Ana Lamo, Barbara Petrongolo, Melanie Ward and Etienne Wasmer

Labour Supply and Incentives to Work in Europe highlights recent developments in the labour supply in Europe and gives a detailed assessment of their link with economic policies and labour market institutions. Despite major changes in European labour supply during the past few decades, the existing literature still lacks a comprehensive study of the relationship between labour supply and labour market institutions from a macro perspective.


Holger Bonin

Subjects: economics and finance, labour economics


Holger Bonin In international comparison, Germany has one of the most generous parental leave systems (Waldfogel, 2001). Since employed mothers became eligible for protected leave beyond the traditional eight weeks after delivery in 1979, a series of reforms sequentially has extended the period of protected leave from six months to three years. Protected leave implies that the employer–employee relationship is on hold and the employee cannot make any claims for wage payments, but she has the option to return to the job held before pregnancy until the protected leave expires. At the same time, parents are eligible for child-rearing benefits. While initially only women on maternity leave were entitled to up to six months of payments, the current scheme is more generous: transfers can be paid irrespective of employment status and for up to two years, though benefits are means tested from the sixth month onwards. For comparison, mothers in the United States need to rely on short-term disability benefits during maternity leave. These usually run out after six weeks. Only since the introduction of the Family and Medical Leave Act in 1993, certain workers have been eligible for unpaid family leave that expires 12 weeks after birth. Very few states, like California, offer paid family leave of up to six weeks. In this institutional context it is not surprising that new mothers tend to return to work quickly (Berger and Waldfogel, 2004). That parental leave and benefit policies are so much more generous...

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