Maternity has a negative impact on the labour market: after childbirth, mothers either reduce their working hours or leave the labour market, incurring income losses that are not experienced by fathers. This study uses administrative employer-employee data to examine how Italian firms respond to working mothers voluntarily leaving their jobs. It assesses whether companies tend to hire fewer women of childbearing age (in favour of either men or older women) or whether they offer them worse contracts.
In response to women leaving work after childbirth, firms are found to hire larger numbers of female employees aged 20 to 45, but on temporary contracts. The share of women on permanent contracts falls significantly for at least two years after mothers' resignations. This evidence suggests that firms respond to the increase in resignations by continuing to hire young women but offering them less job stability, in line with the statistical discrimination hypothesis.
