Female Labour Supply in the Czech Transition: Effects of the Work-Life Conciliation Policies

Czech conciliation policies, i.e. social, family and employment policies affecting households’ fertility and employment choices, have gone through dramatic changes since the 1989 transition to market economy. After a brief presentation of conciliation policies and practices before and after the transition, we focus on the 1995 Czech Parental Benefit reform and we evaluate its impact on mothers’ labour supply. The payment of parental benefits was extended to 4 years instead of 3 without an equivalent extension of the job protected parental leave, leaving to mothers the choice of either guaranteed employment or additional twelve months of benefits. We use difference-in-differences strategy of identification to assess the net effect of this reform on mother’s labour market participation. We find a sizeable and negative impact on mothers’ probability of return to work at the end of the parental leave.