Flexible work helps retain mothers in workforce after parental leave

Companies that implement flexible work arrangements demonstrate a greater ability to retain female employees after they return from parental leave, with these women also experiencing less wage loss. This finding suggests that while parental leave is crucial, its long-term impact on career continuity is limited without subsequent flexible work options.

A report by the Korea Women's Policy Institute analyzed data from 2015-2023, revealing that women who took parental leave initially had a higher probability of being employed. However, one year after returning, their employment probability dropped by 12.65 percentage points compared to women who did not take leave, a trend that worsened over time.

Conversely, women working in companies with flexible work options showed significantly better employment retention. Those in firms with flexible work were 13.4 percentage points more likely to be employed two years after returning from leave, and 9.2 percentage points more likely after three years, compared to women in companies without such options.

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Parental leave is an important system for reducing women's labor market탈출 immediately after childbirth, but if the work environment remains rigid after returning, it is difficult to lead to long-term career maintenance.

Flexible work also mitigated wage disparities. Women who took parental leave in companies without flexible work options saw their monthly wages decrease by 11.4% compared to those who did not take leave. However, in companies offering flexible work, no statistically significant wage reduction was observed.

The study highlights that countries like Denmark, the Netherlands, and Norway, which offer diverse flexible work options such as part-time employment, compressed workweeks, and remote work, have higher female employment rates for mothers with very young children. In contrast, South Korea's employment rate for women with children aged 0-2 remains low at 48%. The report recommends a policy shift towards supporting post-leave employment stability, integrating parental leave with reduced working hours and flexible arrangements, and improving organizational culture and performance evaluation systems to enhance the effectiveness of these policies.

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A system design that allows for the phased integration of reduced working hours and flexible work after parental leave is necessary.