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Parental Leave Benefit and Differential Fertility Responses: Evidence from a German Reform

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  • Kamila Cygan-Rehm

Abstract

This paper examines the causal effects of a major change in the German parental leave benefits on fertility. I use the unanticipated reform of 2007 to assess how a move from a means-tested to an earnings-related benefit affects higher-order births. By using data from the Mikrozensus, I find that the reform significantly affected the timing of higher-order births. Overall, mothers “just” affected by the reform initially reduce subsequent childbearing and start to compensate by the end of the third year. The negative effects are largely driven by lowest-income mothers, who are now worse-off and do not display any catch-up effects.

Suggested Citation

  • Kamila Cygan-Rehm, 2015. "Parental Leave Benefit and Differential Fertility Responses: Evidence from a German Reform," CESifo Working Paper Series 5397, CESifo.
    • Handle: RePEc:ces:ceswps:_5397
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    Cited by:

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    2. Katrin Huber, 2015. "Moving to an Earnings-Related Parental Leave System: Do Heterogeneous Effects on Parents Make Some Children Worse Off?," SOEPpapers on Multidisciplinary Panel Data Research 791, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Anna Raute, 2017. "Can Financial Incentives Reduce the Baby Gap? Evidence from a Reform in Maternity Leave Benefits," NBER Working Papers 23793, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    fertility; family policy; reform; parental leave; Germany;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • K36 - Law and Economics - - Other Substantive Areas of Law - - - Family and Personal Law

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