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Social Norms and Mothers' Labor Market Attachment: The Medium-run Effects of Parental Benefits

Author

Listed:
  • Sebastian Schmitz

    () (Freie Universitaet Berlin)

  • Jochen Kluve

    () (Humboldt-Universitaet zu Berlin)

Abstract

Increasing mothers' labor supply is a key policy challenge in many OECD countries. Germany recently introduced a generous parental benfiet that allows for strong consumption smoothing after childbirth and, by taking into account opportunity costs of childbearing, incentivizes working women to become mothers and return to the labor force rapidly. Using a sharp regression discontinuity design, we estimate policy impacts for up to 5 years after childbirth and find significant and striking patterns. First, medium-run effects on mothers’ employment probability are positive, significant and large, for some subgroups ranging up to 10 per cent. The effects are driven by gains in part-time but not full-time employment. We also find significant increases in working hours. Second, the probability of job continuity rises significantly, i.e. mothers return to their pre-childbirth employer at higher rates. Third, employers reward this return to work by raising job quality significantly and substantially. We argue that the policy generated a profound change in social norms: the new parental benefit defines an “anchor”, i.e. a societally preferred point in time at which mothers return to work after childbirth.

Suggested Citation

  • Sebastian Schmitz & Jochen Kluve, 2014. "Social Norms and Mothers' Labor Market Attachment: The Medium-run Effects of Parental Benefits," Working Papers 2014001, Berlin Doctoral Program in Economics and Management Science (BDPEMS).
  • Handle: RePEc:bdp:wpaper:2014001
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bergemann, Annette & Riphahn, Regina T., 2015. "Maternal Employment Effects of Paid Parental Leave," IZA Discussion Papers 9073, Institute for the Study of Labor (IZA).
    2. Geyer, Johannes & Haan, Peter & Wrohlich, Katharina, 2015. "The effects of family policy on maternal labor supply: Combining evidence from a structural model and a quasi-experimental approach," Labour Economics, Elsevier, vol. 36(C), pages 84-98.
    3. -, 2014. "Economic Survey of Latin America and the Caribbean 2014: Challenges to sustainable growth in a new external context," Estudio Económico de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37033 edited by Eclac, OCTOBER.
    4. Anita Kottwitz & Anja Oppermann & C. Katharina Spiess, 2016. "Parental leave benefits and breastfeeding in Germany: effects of the 2007 reform," Review of Economics of the Household, Springer, vol. 14(4), pages 859-890, December.
    5. Claudia Olivetti & Barbara Petrongolo, 2017. "The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 205-230, Winter.
    6. -, 2014. "Estudio Económico de América Latina y el Caribe 2014: desafíos para la sostenibilidad del crecimiento en un nuevo contexto externo," Estudio Económico de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 36970 edited by Cepal, OCTOBER.
    7. Mathias Huebener & Daniel Kuehnle & C. Katharina Spiess, 2017. "Paid Parental Leave and Child Development: Evidence from the 2007 German Parental Benefit Reform and Administrative Data," Discussion Papers of DIW Berlin 1651, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    Parental benefits; Female labor supply; Regression discontinuity;

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • 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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