Given the economic implications of a low‐fertility rate, many countries have implemented paid maternity leave to promote births. However, the efficacy of this policy is mostly unknown. We examined whether paid maternity leave in South Korea, which has a fertility rate among the lowest in the world, is directly related to infant development and employed mothers' second‐birth intentions, and indirectly associated with these outcomes via parenting stress. Participants included 315 married and employed Korean mothers in the months after giving birth to their first child. Paid maternity leave was beneficial for infant development but was not a solution for promoting second‐birth intentions among employed mothers in Korea. Parenting stress adversely affected both infant development and employed mothers' second‐birth intentions, and it may therefore need to be considered as work–family policies, fertility issues, and infant development in families are addressed. Implications considering cultural and familial contexts are discussed.