We investigate the unintended consequences of maternity leave extension on gender gaps in the labor market. Using millions of job applications on an online job platform and the staggered extension of maternity leave across Chinese provinces, we find that an average increase (22%) in the length of paid maternity leave led to a 3.7–percentage-point decline in positive callbacks to female applicants relative to their male counterparts, equivalent to 17% of the pre-policy mean. In response, female job seekers shifted toward jobs with 5.4% lower wages than male applicants, submitted 4.4 more job applications (20% of the pre-policy mean) and experienced 2.1 weeks (19% of the pre-policy mean) longer job search duration. We also find that government subsidies that partially cover firms' wage costs of extended maternity leave help alleviate its adverse impact on gender disparities in hiring.