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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

    () (DIW Berlin)

  • Kühnle, Daniel

    () (University of Erlangen-Nuremberg)

  • Spieß, C. Katharina

    () (DIW Berlin)

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 for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11794
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    Keywords

    parental leave benefit; child development; school readiness; motor skills; language skills; socio-emotional stability;

    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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