Male use of parental leave in Luxembourg: Empirical analysis of administrative records

The study investigates the decisions of fathers to use parental leave at the individual level. The focus is on the opportunity cost fathers would face for using the leave. Opportunity cost is measured in two ways: as the difference between the parental leave benefit and the salary of the father and as the mean salary growth for a period of six months. The first measure is a proxy for the direct opportunity cost, while the second aims to capture opportunity costs of being away from the workplace in terms of foregone promotion opportunities. Data for the analysis are based on anonymous administrative records of fathers working in the Grand Duchy of Luxembourg. The analysis deploys a duration model to investigate fathers' use of parental leave throughout an observation period of five years. The results of the study suggest a negative, although non-linear, relationship between foregone income and the hazard of taking parental leave. Surprisingly, however, salary growth in the six-month period prior to taking parental leave has a positive, rather than a negative effect on the hazard of taking parental leave.