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Female labour supply and parental leave benefits - the causal effect of paying higher transfers for a shorter period of time


  • Annette Bergemann
  • Regina Riphahn


We study the labour supply effects of a major change in child-subsidy policy in Germany in 2007 designed to increase both fertility and shorten birth-related employment interruptions. The reform involved a move from a means-tested maternity leave benefit system that paid a maximum of 300 Euro for up to 2 years to a benefit system that replaced two-thirds of pre-birth earnings for at most 1 year. As the reform took place very recently, we estimate the labour supply effect by using data drawn from the German Socio-Economic Panel (GSOEP) on the intention of women to return to the labour market. Our results show that the reform yields most of the intended effects: the fraction of mothers who plan to return to the labour market within a year after the interview increased by 14 percentage points.

Suggested Citation

  • Annette Bergemann & Regina Riphahn, 2011. "Female labour supply and parental leave benefits - the causal effect of paying higher transfers for a shorter period of time," Applied Economics Letters, Taylor & Francis Journals, vol. 18(1), pages 17-20.
  • Handle: RePEc:taf:apeclt:v:18:y:2011:i:1:p:17-20 DOI: 10.1080/13504850903425173

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    References listed on IDEAS

    1. Wen-Jui Han & Christopher Ruhm & Jane Waldfogel, 2009. "Parental leave policies and parents' employment and leave-taking," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(1), pages 29-54.
    2. 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;European Society for Population Economics, vol. 9(3), pages 247-266, August.
    3. Edward C. Norton & Hua Wang & Chunrong Ai, 2004. "Computing interaction effects and standard errors in logit and probit models," Stata Journal, StataCorp LP, vol. 4(2), pages 154-167, June.
    4. 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.
    5. Spiess, C.Katharina & Wrohlich, Katharina, 2008. "The Parental Leave Benefit Reform in Germany: Costs and Labour Market Outcomes of Moving towards the Nordic Model," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 575-591.
    6. Michael Baker & Kevin Milligan, 2008. "How Does Job-Protected Maternity Leave Affect Mothers' Employment?," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 655-691, October.
    7. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
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    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure


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