This study addresses the question of economic and workplace related determinants and consequences of fathers’ parental leave use in Sweden. The analysis is based on the Swedish Level of Living Survey for the years 1991 and 2000. The results show that wages and the probability of taking parental leave beyond the ‘daddy month’ are inversely u-shaped: with very low hourly wages it does not seem to be affordable to take longer parental leave, whereas with higher wages it does not seem to be rational. Working in the public sector increases the probability to take parental leave beyond the ‘daddy month’ which is rather explained by different structures and workplace cultures than by economic incentives. Wage penalties for parental leave could not be found, but fatherhood more generally seems to lead to a wage premium. Self-selection into family-compatible employments seems to be an important consequence for mothers who take extended parental leave but similar effects were not found for fathers
