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Parental benefits improve parental well-being: evidence from a 2007 policy change in Germany

Author

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  • Mikko Myrskylä

    (Max Planck Institute for Demographic Research, Rostock, Germany)

  • Rachel Margolis

Abstract

Family policies aim to influence fertility and labor force participation, and support families. However, often only fertility and labor supply are considered in policy evaluations. For example, the 2007 extension of parental leave benefits in Germany is generally considered unsuccessful because changes in fertility and labor force participation were modest. However, parental wellbeing is also important, in itself and as a determinant of child well-being. This paper is the first to consider the effect of parental leave policies on parental well-being. We analyze the German 2007 parental benefits reform and find that the extension of benefits strongly increased parental well-being around the birth of a child. The effect is observed for first and second births and for various sub-populations. A placebo test using data from Britain where there was no policy change supports the causal interpretation. Our results cast the success of the German 2007 policy change in new light. Parental leave benefits have an important direct impact on parental wellbeing.

Suggested Citation

  • Mikko Myrskylä & Rachel Margolis, 2013. "Parental benefits improve parental well-being: evidence from a 2007 policy change in Germany," MPIDR Working Papers WP-2013-010, Max Planck Institute for Demographic Research, Rostock, Germany.
  • Handle: RePEc:dem:wpaper:wp-2013-010
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    File URL: http://www.demogr.mpg.de/papers/working/wp-2013-010.pdf
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    References listed on IDEAS

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    1. Angela Luci & Olivier Thevenon, 2011. "The impact of family policy packages on fertility trends in developed countries," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00660630, HAL.
    2. 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.
    3. Robert Drago & Katina Sawyer & Karina M Shreffler & Diana Warren & Mark Wooden, 2009. "Did Australia's Baby Bonus Increase the Fertility Rate?," Melbourne Institute Working Paper Series wp2009n01, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    4. Tamm, Marcus, 2013. "The Impact of a Large Parental Leave Benefit Reform on the Timing of Birth around the Day of Implementation," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 585-601.
    5. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags And Leads in Life Satisfaction: a Test of the Baseline Hypothesis," Economic Journal, Royal Economic Society, vol. 118(529), pages 222-243, June.
    6. 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.
    7. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    8. Angela Luci & Olivier Thevenon, 2011. "The impact of family policy packages on fertility trends in developed countries," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00657603, HAL.
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    Cited by:

    1. Rachel Margolis & Mikko Myrskylä, 2015. "Parental Well-being Surrounding First Birth as a Determinant of Further Parity Progression," Demography, Springer;Population Association of America (PAA), vol. 52(4), pages 1147-1166, August.

    More about this item

    Keywords

    Germany; parenthood;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • Z0 - Other Special Topics - - General

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