Parenting leave duration and mothers’ skills along the life course

A prominent explanation for the motherhood wage penalty is human capital loss during career interruptions around childbirth. This study provides first direct evidence on this mechanism by examining whether longer parenting leave reduces mothers’ work-relevant skills. Using a newly constructed policy dataset covering 40 years of maternity and parental leave reforms across 19 European countries, we link variation in statutory leave duration to later-life numeracy skills – a strong predictor of earnings. We find that each additional year of statutory parenting leave reduces mothers’ numeracy scores by 3% to 5%. This decline is not driven by fertility responses to the policies. Instead, longer entitlements lengthen career breaks in the short run and lower employment in the long run. This suggests extended leave may decrease mothers’ labor market attachment and thus reduce opportunities to use and maintain work-relevant skills along the life course, consistent with the “use it or lose it” hypothesis. Results are driven by countries with long leave, pointing to nonlinearities: shorter leave does not harm skills, whereas extended leave leads to skill loss. Ultimately, longer entitlements are associated with only modest reductions in earnings, suggesting skills play – at most – a minor role in the motherhood penalty.