Income loss and leave taking: Do financial benefit top-ups influence fathers’ parental leave use in Sweden?

One of the major reasons for a gendered division of parental leave is the financial compensation during leave. Swedish national parental leave benefit provides 77.6 % of earlier earnings up to a ceiling, but collective agreements between employer and unions have over time developed to cover the income loss during leave. We focus on the importance of such agreements for fathers’ parental leave take-up. The main division of agreements is between the 1) state, 2) municipality and county and 3) private sector. The difference in agreements for different segments of the labor market is likely to influence parental leave use, especially for parents with income over the ceiling and who would otherwise lose a lot financially while on leave. We compare how parental leave is used in the beginning of the 2000s and a decade later, when agreements have been expanded. Our focus will be on men in different sectors and with different income levels, thus differently affected by the change in the agreements. We focus on first born children. Results indicate that high-income fathers increase their use over the time period. Especially in the private sector a polarization can be seen, where fathers with high income increase their leave use over time while fathers with lower incomes fall behind. However, we find only small differences in trends in leave take-up between fathers’ in different sectors. The study deepens our understanding of how and whether the level of financial compensation during leave matters for take-up, even in an already generous statutory system.