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Parental Leave: Economic Incentives and Cultural Change

Author

Listed:
  • Jim Albrecht
  • Per-Anders Edin
  • Raquel Fernandez
  • Jiwon Lee
  • Peter Skogman Thoursie
  • Susan Vroman

Abstract

In 2002, Sweden reformed its parental leave system by adding a second "daddy month," i.e., a second month of pay-related parental leave reserved exclusively for each parent. In addition to giving fathers an economic incentive to take more leave, this change had an effect on cultural norms. We develop and estimate a model of the household in which preferences towards leave depend on the behavior of one's peers and use it to quantify the magnitudes of the economic-incentive effects as well as the evolving norms. We find that endogenously evolving cultural norms play a major role. We use our model to evaluate the effects of several potential policy changes including decreasing the cost of child care and giving each parent a substantially larger non-transferable endowment of parental leave and conclude that only the latter would have a significant effect on the share of parental leave taken by men.

Suggested Citation

  • Jim Albrecht & Per-Anders Edin & Raquel Fernandez & Jiwon Lee & Peter Skogman Thoursie & Susan Vroman, 2026. "Parental Leave: Economic Incentives and Cultural Change," RFBerlin Discussion Paper Series 26038, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:26038
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    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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