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Title page 1

Contents 1

Abstract 3

1. Introduction 4

2. Related Literature 8

3. Parental Leave Reforms 11

4. Research Design 12

5. Data and Summary Statistics 19

6. Results 22

6.1. First-stage Estimates 22

6.2. Results on Employment 23

6.3. Results on Corporate Outcomes 26

7. Mechanisms 28

8. Conclusion 34

References 35

Online Appendix 42

A. Additional Descriptives 42

B. Falsification Exercise Using Sickness Leave Duration 43

C. Additional Results 45

D. Robustness Exercise: LIML Estimates 55

E. Additional Details on the Data 58

Tables 12

Table 1. Parental Leave Reforms in Norway: 1978-1993 12

Table 2. Balance Tests à la Borusyak et al. (2022) 16

Table 3. Descriptive Statistics, 1994-2013 21

Table 4. First-Stage Estimates, 1994-2013 23

Table 5. The Impact of Parental Leave Related Absence on Firm Employment, 1994-2013 24

Table 6. The 2SLS Effect of Parental Leave Related Absence on Employment Flows of Women Aged 40 or Less, 1994-2013 25

Table 7. The 2SLS Effect of Parental Leave Related Absence on Corporate Outcomes, 1995-2013 26

Table 8. The 2SLS Effect of Parental Leave Related Absence on Three Measures of Wages, Women Aged 40 or Less 29

Table 9. The 2SLS Effect of Parental Leave Related Absence on Part-Time Employment, Women Aged 40 or Less, 1994-2013 30

Table 10. The 2SLS Effect of Parental Leave Related Absence on Contractual Hours and Overtime Hours 31

Table 11. The 2SLS Effect of Parental Leave Related Absence on Firms' Workforce Human Capital, 1994-2013 32

Figures 18

Figure 1. Shifts and Shares by Local Labor Markets, 2005 18

Appendix Tables 42

Table A.1. Descriptive Statistics (1983-1986) 42

Table B.1. First-stage Results with Sickness Leave: 1994-2013 43

Table B.2. The Effect of Sickness Leave Absence on Firm Employment Stocks 43

Table B.3. The Effect of Sickness Leave Absence on Employment Flows, Women Aged 40 or Less 44

Table B.4. The Effect of Sickness Leave Absence on Part-Time Employment, Women Aged 40 or Less 44

Table C.1. The 2SLS Effect of Parental Leave Related Absence on Employment, Men Aged 40 or Less (Stocks): 1994-2013 45

Table C.2. The Effect of Parental Leave Related Absence on Plant Closures: 1994-2013 45

Table C.3. The 2SLS Effect of Parental Leave Related Absence on Three Measures of Wages, Women Aged More than 40 and All Men 46

Table C.4. The 2SLS Effect of Parental Leave Related Absence on Three Measures of Wages, Men Aged 40 or Less 46

Table C.5. The 2SLS Effect of Parental Leave Related Absence on the Wage Gap between Labor Inputs, (f versus o) 47

Table C.6. The 2SLS Effect of Parental Leave Related Absence on the Wage Gap between Men (of All Ages) and Women Aged 40 or Less 47

Table C.7. The 2SLS Effect of Parental Leave Related Absence on Three Measures of Wages without Firm FE, Women Aged 40 or Less 48

Table C.8. The 2SLS Effect of Parental Leave Related Absence on Three Measures of Wages, 25th and 75th Percentiles 48

Table C.9. The 2SLS Effect of Parental Leave Related Absence on Three Measures of Wages of Young Women, 25th and 75th Percentiles 49

Table C.10. The 2SLS Effect of Parental Leave Related Absence on Short Part-time Employment of Women Aged 40 or Less, 1994-2013 49

Table C.11. The 2SLS Effect of Parental Leave Related Absence on Part-time Employment of Older Women and All Men, 1994-2013 50

Table C.12. First-Stage Estimates (Shorter Time Horizon), 1994-2004 50

Table C.13. The Effect of Parental Leave Related Absence on Firm Employment Stocks (Shorter Time Horizon), 1994-2004 51

Table C.14. The 2SLS Effect of Parental Leave Related Absence on Firm Employment Flows, Women Aged 40 or Less (Shorter Time Horizon, 1994-2004) 51

Table C.15. The 2SLS Effect of Parental Leave Related Absence on Part-Time Employment, Women Aged 40 or Less (Shorted Time Horizon, 1994-2004) 52

Table D.1. The LIML Effect of Parental Leave Related Absence on Firm Employment Stocks, 1994-2013 55

Table D.2. The LIML Effect of Parental Leave Related Absence on Firm Employment Flows, Women Aged 40 or Less (1994-2013) 55

Table D.3. The LIML Effect of Parental Leave Related Absence on Corporate Outcomes, 1995-2013 56

Table D.4. The LIML Effect of Parental Leave Related Absence on Three Measures of Wages of Women Aged 40 or Less 56

Table D.5. The LIML Effect of Parental Leave Related Absence on Part-time Employment of Women Aged 40 or Less, 1994-2013 57

Table D.6. The LIML Effect of Parental Leave Related Absence on Contractual Hours and Overtime Hours 57

Appendix Figures 53

Figure C.1. Heterogeneity by Firm Size and Sector 53

Figure C.2. Heterogeneity by Industry 53

Figure C.3. Heterogeneity by CEO Gender 54

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