The Parental Leave Benefit Reform in Germany: Costs and Labour Market Outcomes of Moving towards the Nordic Model
AbstractGermany is known to have one of the lowest fertility rates among Western European countries and also relatively low employment rates of mothers with young children. Although these trends have been observed during the last decades, the German public has only recently begun discussing these issues. In order to reverse these trends, the German government recently passed a reform of the parental leave benefit system in line with the model practiced in Nordic countries. The core piece of the reform is the replacement of the existing means-tested parental leave benefit by a wage-dependent benefit for the period of one year. In this paper we simulate fiscal costs and expected labour market outcomes of this reform. Based on a micro-simulation model for Germany we calculate first-round effects, which assume no behavioural changes and second-round effects, where we take labour supply changes into account. Our results show that on average all income groups, couples and single households, benefit from the reform. The calculation of overall costs of the reform shows that the additional costs are moderate. As far as the labour market behaviour of parents is concerned, we find no significant changes of labour market outcomes in the first year after birth. However, in the second year, mothers increase their working hours and labour market participation significantly. Our results suggest that the reform will achieve one of its aims, namely the increase in the labour market participation of mothers with young children. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by ZBW - German National Library of Economics in its journal EconStor Open Access Articles.
Volume (Year): (2008-10)
Issue (Month): ()
Contact details of provider:
Postal: Düsternbrooker Weg 120, 24105 Kiel / Neuer Jungfernstieg 21, 20354 Hamburg
Phone: +49 431 8814-1
Fax: +49 431 8814-520
Web page: http://www.econstor.eu/
More information through EDIRC
Female labour supply; Parental leave; Micro simulation study;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ekberg, John & Eriksson, Rickard & Friebel, Guido, 2005.
"Parental Leave – A Policy Evaluation of the Swedish "Daddy-Month" Reform,"
IZA Discussion Papers
1617, Institute for the Study of Labor (IZA).
- Ekberg, John & Eriksson, Rickard & Friebel, Guido, 2013. "Parental leave — A policy evaluation of the Swedish “Daddy-Month” reform," Journal of Public Economics, Elsevier, vol. 97(C), pages 131-143.
- Viktor Steiner & Katharina Wrohlich, 2006.
"Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution and Work Incentives,"
Discussion Papers of DIW Berlin
612, DIW Berlin, German Institute for Economic Research.
- Steiner, Viktor & Wrohlich, Katharina, 2006. "Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution and Work Incentives?," IZA Discussion Papers 2245, Institute for the Study of Labor (IZA).
- Jan M. Hoem, 2005. "Why does Sweden have such high fertility?," MPIDR Working Papers WP-2005-009, Max Planck Institute for Demographic Research, Rostock, Germany.
- Jacob Klerman & Arleen Leibowitz, 1999. "Job continuity among new mothers," Demography, Springer, vol. 36(2), pages 145-155, May.
- Jan Ondrich & C. Spiess & Qing Yang & Gert Wagner, 2003. "The Liberalization of Maternity Leave Policy and the Return to Work after Childbirth in Germany," Review of Economics of the Household, Springer, vol. 1(1), pages 77-110, January.
- C. Katharina Spiess & Jan Ondrich & Qing Yang, 1996.
"Barefoot and in a German kitchen: Federal parental leave and benefit policy and the return to work after childbirth in Germany,"
Journal of Population Economics,
Springer, vol. 9(3), pages 247-266.
- Ondrich, Jan & Spiess, C Katharina & Yang, Qing, 1996. "Barefoot and in a German Kitchen: Federal Parental Leave and Benefit Policy and the Return to Work after Childbirth in Germany," Journal of Population Economics, Springer, vol. 9(3), pages 247-66, August.
- Lawrence M. Berger & Jane Waldfogel, 2004. "Maternity leave and the employment of new mothers in the United States," Journal of Population Economics, Springer, vol. 17(2), pages 331-349, 06.
- Christopher J. Ruhm, 1998.
"The Economic Consequences Of Parental Leave Mandates: Lessons From Europe,"
The Quarterly Journal of Economics,
MIT Press, vol. 113(1), pages 285-317, February.
- Christopher J. Ruhm, 1996. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," NBER Working Papers 5688, National Bureau of Economic Research, Inc.
- Siv S. Gustafsson & Shirley Dex & Cécile M. M. P. Wetzels & Jan Dirk Vlasblom, 1996.
"Women`s labor force transitions in connection with childbirth: A panel data comparison between Germany, Sweden and Great Britain,"
Journal of Population Economics,
Springer, vol. 9(3), pages 223-246.
- Gustafsson, Siv S, et al, 1996. "Women's Labor Force Transitions in Connection with Childbirth: A Panel Data Comparison between Germany, Sweden and Great Britain," Journal of Population Economics, Springer, vol. 9(3), pages 223-46, August.
- Ronsen, Marit & Sundstrom, Marianne, 1996. "Maternal Employment in Scandinavia: A Comparison of the After-Birth Employment Activity of Norwegian and Swedish Women," Journal of Population Economics, Springer, vol. 9(3), pages 267-85, August.
- Albrecht, James W. & Edin, Per-Anders & Sundström, Marianne & Vroman, Susan B., 1996.
"Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data,"
Working Paper Series
1996:23, Uppsala University, Department of Economics.
- James W. Albrecht & Per-Anders Edin & Marianne Sundström & Susan B. Vroman, 1999. "Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 294-311.
- Albrecht, J & Edin, P-A & Sundstrom, M & Vroman, S-B, 1996. "Career Interruptions and Subsequent Earning : A Reexamination Using Swedish Data," Papers 1996-23, Uppsala - Working Paper Series.
- Jan M. Hoem, 2005. "Why does Sweden have such high fertility?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 13(22), pages 559-572, November.
- Jane Waldfogel, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-156, Winter.
- Gutierrez-Domenech, Maria, 2005. "Employment after motherhood: a European comparison," Labour Economics, Elsevier, vol. 12(1), pages 99-123, February.
- Pylkkänen, Elina & Smith, Nina, 2004.
"Career Interruptions due to Parental Leave - A Comparative Study of Denmark and Sweden,"
04-1, University of Aarhus, Aarhus School of Business, Department of Economics.
- Elina Pylkkänen & Nina Smith, 2003. "Career Interruptions Due to Parental Leave: A Comparative Study of Denmark and Sweden," OECD Social, Employment and Migration Working Papers 1, OECD Publishing.
- Hashimoto, Masanori & Percy, Rick & Schoellner, Teresa & Weinberg, Bruce A., 2004. "The Long and Short of It: Maternity Leave Coverage and Women’s Labor Market Outcomes," IZA Discussion Papers 1207, Institute for the Study of Labor (IZA).
- Anna Kurowska & Michal Myck & Katharina Wrohlich, 2012.
"Family and Labor Market Choices: Requirements to Guide Effective Evidence-Based Policy,"
Discussion Papers of DIW Berlin
1234, DIW Berlin, German Institute for Economic Research.
- Kurowska, Anna & Myck, Michal & Wrohlich, Katharina, 2012. "Family and Labor Market Choices: Requirements to Guide Effective Evidence-Based Policy," IZA Discussion Papers 6846, Institute for the Study of Labor (IZA).
- C. Katharina Spieß, 2011. "Vereinbarkeit von Familie und Beruf – wie wirksam sind deutsche „Care Policies“?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 4-27, 05.
- Fagnani, Jeanne, 2012. "Recent reforms in childcare and family policies in France and Germany: What was at stake?," Children and Youth Services Review, Elsevier, vol. 34(3), pages 509-516.
- Anne Salles & Clémentine Rossier & Sara Brachet, 2010. "Understanding the long term effects of family policies on fertility: The diffusion of different family models in France and Germany," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 22(34), pages 1057-1096, June.
- Barbara Hanel, 2012. "The Impact of Paid Maternity Leave on Labour Market Outcomes," Melbourne Institute Working Paper Series wp2012n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.