About
Sofia Bapna and Russell J. Funk, researchers from the Carlson School of Management at the University of Minnesota, investigated the impact of employer paid maternity leave on women’s hiring outcomes in India’s IT sector. Their study focused on policies where employers, not governments, bear the cost of maternity leave. Specifically, they examined a new Indian law that extended employer-paid, job-protected maternity leave from 12 to 26 weeks for companies with 10 or more employees. Using millions of job applications from a major Indian e-recruitment platform, the researchers analyzed how this policy affected female applicants’ chances of being invited for interviews, particularly in firms subject to the law based on company size.
Challenge
While maternity leave is widely regarded as beneficial for women’s workforce participation, many countries require employers to fund it, potentially creating hiring disincentives. The researchers aimed to empirically test whether such employer paid policies lead to discrimination. To do this, they needed granular, company level data on job postings, interview invitations, and firm characteristics such as size and profitability. They used data from a job platform and supplemented it with LinkedIn data provided by Bright Data to determine company size (in terms of number of employees), which was crucial for identifying which firms were subject to the law.
Impact
The study found that, following the implementation of the law, women were approximately 22 percent less likely to be invited for interviews at low profitability companies affected by the legislation. Moreover, at these companies, there was no observed change in the number of applications submitted by women post-legislation, indicating that the decline in interview invitations was not due to reduced interest or participation by female applicants. This suggests that employer paid maternity leave can unintentionally reduce women’s hiring prospects. The findings highlight the need for complementary policies such as anti discrimination laws and shared parental leave to ensure that well intentioned legislation does not inadvertently harm the very group it aims to support.
