Working or stay-at-home mum? The influence of family benefits and religiosity

It is a well-established fact that mothers' labour force participation reacts differently to different types of family benefits. It is also already well-known that cultural and religious factors have an impact on their labour force participation. But does the labour force reaction to family benefits differ among more religious mothers? In this paper, I analyse how both factors – benefits and religiosity – interact when it comes to the decision concerning labour force participation. Firstly, I present a theoretical model which predicts that this difference exists. Secondly, I test this prediction in a sample of pooled cross-section data from 10 OECD countries using different measures to assess the extent of religiosity. There is evidence that religious mothers react less than non-religious mothers to increases in family benefits. I also find important differences among various religious affiliations. These results imply that trends in religiosity should be considered when designing labour market policies.