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Parental Leave Policies and Socio-Economic Gaps in Child Development: Evidence from a Substantial Benefit Reform Using Administrative Data

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  • Huebener, Mathias

    (Bundesinstitut für Bevölkerungsforschung (BiB))

  • Kühnle, Daniel

    (University of Duisburg-Essen)

  • Spieß, C. Katharina

    (Bundesinstitut für Bevölkerungsforschung (BiB))

Abstract

This paper examines the effects of substantial changes in paid parental leave on child development and socio-economic development gaps. We exploit a German reform from 2007 that both expanded paid leave in the first year and removed paid leave in the second year following childbirth. Higher-income households benefited relatively more from the reform than low-income households. We use administrative data from mandatory school entrance examinations containing detailed child development assessments at age six within a difference-in-differences approach. Our precise and robust estimates reveal no effects of the changes in parental leave benefits on child development across various socio-economic groups, and consequently no effects on socio-economic development gaps.

Suggested Citation

  • Huebener, Mathias & Kühnle, Daniel & Spieß, C. Katharina, 2018. "Parental Leave Policies and Socio-Economic Gaps in Child Development: Evidence from a Substantial Benefit Reform Using Administrative Data," IZA Discussion Papers 11794, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11794
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    Cited by:

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    3. Alena Bicakova & Klara Kaliskova, 2022. "Is Longer Maternal Care Always Beneficial? The Impact of a Four-year Paid Parental Leave," CERGE-EI Working Papers wp732, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    4. Nabanita Datta Gupta & Jonas Jessen & C. Katharina Spiess, 2023. "Maternal Life Satisfaction and Child Development from Toddlerhood to Adolescence," SOEPpapers on Multidisciplinary Panel Data Research 1189, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Mari, Gabriele & Cutuli, Giorgio, 2018. "Do parental leaves make the motherhood wage penalty worse? Assessing two decades of German reforms," SocArXiv f2nrc, Center for Open Science.
    6. Frodermann, Corinna & Wrohlich, Katharina & Zucco, Aline, 2020. "Parental leave reform and long-run earnings of mothers," IAB-Discussion Paper 202009, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Frodermann, Corinna & Wrohlich, Katharina & Zucco, Aline, 2020. "Parental Leave Reform and Long-Run Earnings of Mothers," IZA Discussion Papers 12935, Institute of Labor Economics (IZA).
    8. Huebener, Mathias & Kuehnle, Daniel & Spiess, C. Katharina, 2019. "Parental leave policies and socio-economic gaps in child development: Evidence from a substantial benefit reform using administrative data," Labour Economics, Elsevier, vol. 61(C).
    9. Mathias Huebener, 2019. "Life Expectancy and Parental Education in Germany," SOEPpapers on Multidisciplinary Panel Data Research 1023, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Tudor, Simona, 2020. "Financial incentives, fertility and early life child outcomes," Labour Economics, Elsevier, vol. 64(C).
    11. Kühnle, Daniel & Oberfichtner, Michael, 2020. "Cash-For-Care, or Caring for Cash? The Effects of a Home Care Subsidy on Maternal Employment, Childcare Choices, and Children's Development," IZA Discussion Papers 13271, Institute of Labor Economics (IZA).
    12. Gabriele Mari & Giorgio Cutuli, 2019. "Do Parental Leaves Make the Motherhood Wage Penalty Worse? Assessing Two Decades of German Reforms," SOEPpapers on Multidisciplinary Panel Data Research 1025, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Katharina Heisig & Larissa Zierow, 2020. "Extended Parental Leave in the GDR: Children Show Higher Life Satisfaction in the Long Run," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 27(02), pages 07-09, April.
    14. Huebener, Mathias, 2019. "Life expectancy and parental education," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 232, pages 351-365.
    15. Mathias Huebener & Jonas Jessen & Daniel Kuehnle & Michael Oberfichtner, 2022. "Parental Leave, Worker Substitutability, and Firms' Employment," Berlin School of Economics Discussion Papers 0007, Berlin School of Economics.
    16. Huebener, Mathias, 2019. "Life expectancy and parental education," Social Science & Medicine, Elsevier, vol. 232(C), pages 351-365.
    17. Huebener, Mathias & Jessen, Jonas & Kühnle, Daniel & Oberfichtner, Michael, 2021. "A Firm-Side Perspective on Parental Leave," IZA Discussion Papers 14478, Institute of Labor Economics (IZA).
    18. 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.

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    13. Fabel, Marc, 2021. "Maternity leave and children's health outcomes in the long-term," Journal of Health Economics, Elsevier, vol. 76(C).
    14. Annette Bergemann & Regina T. Riphahn, 2023. "Maternal employment effects of paid parental leave," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(1), pages 139-178, January.
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    More about this item

    Keywords

    language skills; motor skills; school readiness; child development; parental leave benefit; socio-emotional stability;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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