Mothers at work: How mandating a short maternity leave affects work and fertility

Switzerland mandated a 14-week paid maternity leave in 2005 when many firms already offered a similar benefit. While the mandate had only small and temporary effects on labor market outcomes of first-time mothers, it raised the share of those having a second child by three percentage points. Women employed in firms with prior paid leave sharply increased their subsequent fertility. In contrast, women employed in other firms did not change their fertility behaviour, but instead saw a persistent increase in their earnings after birth. This pattern of results suggests that firms with pre-mandate leave passed on (some of) their resulting cost-savings to their employees - "trickle down effects " - by making their maternity leave more generous than mandated, hiring temporary replacement workers and/or supporting mothers' return to work in other ways.