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Short-run fertility effects of parental leave benefits: evidence from a structural model

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  • Holger Stichnoth

    (ZEW – Leibniz Centre for European Economic Research)

Abstract

Based on a structural model of fertility and female labour force supply with unobserved heterogeneity and state dependence, we evaluate the 2007 reform of parental leave benefits in Germany, which replaced a flat, means-tested benefit by a generous earnings-related transfer. The model predicts a short-term fertility effect of about 4%, which is consistent with recent quasi-experimental evidence. The fertility effect is strongest for first births and increases with income. We use the model for a number of counterfactual policy experiments in which we vary the generosity of parental leave benefits.

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  • Holger Stichnoth, 2020. "Short-run fertility effects of parental leave benefits: evidence from a structural model," Empirical Economics, Springer, vol. 59(1), pages 143-168, July.
    • Handle: RePEc:spr:empeco:v:59:y:2020:i:1:d:10.1007_s00181-019-01673-w
    DOI: 10.1007/s00181-019-01673-w
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    Cited by:

    1. Bassford, Micaela & Fisher, Hayley, 2016. "Bonus babies? The impact of paid parental leave on fertility intentions," Working Papers 2016-04, University of Sydney, School of Economics.
    2. Holger Stichnoth & Raphael Abiry & Karsten Reuss, 2015. "Completed fertility effects of family policy measures: evidence from a life-cycle model," Economics Bulletin, AccessEcon, vol. 35(3), pages 1726-1733.
    3. Micaela Bassford & Hayley Fisher, 2020. "The Impact of Paid Parental Leave on Fertility Intentions," The Economic Record, The Economic Society of Australia, vol. 96(315), pages 402-430, December.
    4. Holger Bonin & Karsten Reuss & Holger Stichnoth, 2016. "The Monetary Value of Family Policy Measures in Germany over the Life Cycle: Evidence from a Dynamic Microsimulation Model," CESifo Economic Studies, CESifo, vol. 62(4), pages 650-671.

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    More about this item

    Keywords

    Fertility; Female labour supply; Family policy; Parental leave; Latent-class models; State dependence;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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