Implications of changes in the law on paternal and maternal leave in Iceland during the period 2001-2011

Olof Gardarsdottir, University of Iceland
Heida Maria Sigurdardottir, Brown University

This paper examines the effects of the passing of a law on the joint entitlement of mothers and fathers to parental leave in Iceland. The parents share the rights to nine full months of parental leave; three months are reserved for each parent and the remaining three months can be divided between them in the way of their choosing. Initially the maximum payment during leave was high. With the economic recession, starting in 2008, the ceiling was lowered to a sum below the mean wages in Iceland. The present analysis looks at the effects of parental leave policy changes in Iceland during the period 2001-2011. With the full implementation of the parental leave act of 2000, a majority of fathers took three month of leave whereas the joint entitlement was almost exclusively taken by the mothers. Length of fathers’ leave declined after the lowering of the maximum payment. Here we analyze to what extent parents’ income, gender, and educational status affect the likelihood of making full use of their entitlement to parental leave.