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Parental Leave, (In)formal Childcare and Long-term Child Outcomes

Author

Listed:
  • Martin Halla
  • Nicole Schneeweis
  • Martina Zweimüller
  • Natalia Danzer

Abstract

We provide a novel interpretation of the estimated treatment effects from evaluations of parental leave reforms. Accounting for the counterfactual mode of care is crucial in the analysis of child outcomes and potential mediators. We evaluate a large and generous parental leave extension in Austria exploiting a sharp birthday cutoff-based discontinuity in the eligibility for extended parental leave and geographical variation in formal childcare. We find that estimated treatment effects on long-term child outcomes differ substantially according to the availability of formal childcare and the mother’s counterfactual work behavior. We show that extending parental leave has significant positive effects on children’s health and human capital outcomes only if the reform induces a replacement of informal childcare with maternal care. We conclude that care provided by mothers (or formal institutions) is superior to informal care-arrangements.

Suggested Citation

  • Martin Halla & Nicole Schneeweis & Martina Zweimüller & Natalia Danzer, 2017. "Parental Leave, (In)formal Childcare and Long-term Child Outcomes," CDL Aging, Health, Labor working papers 2017-04, The Christian Doppler (CD) Laboratory Aging, Health, and the Labor Market, Johannes Kepler University Linz, Austria.
    • Handle: RePEc:jku:cdlwps:wp1704
    Note: English
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    1. is not listed on IDEAS
    2. Chuard, Caroline, 2020. "Womb at work: The missing impact of maternal employment on newborn health," Journal of Health Economics, Elsevier, vol. 73(C).
    3. Gruber, Jonathan & Kosonen, Tuomas & Huttunen, Kristiina, 2025. "Paying moms to stay home: Short and long run effects on parents and children," Journal of Public Economics, Elsevier, vol. 251(C).
    4. Nicardo S. McInnis & Katherine Michelmore & Natasha Pilkauskas, 2023. "The Intergenerational Transmission of Poverty and Public Assistance: Evidence from the Earned Income Tax Credit," NBER Working Papers 31429, National Bureau of Economic Research, Inc.
    5. Ziegler, Lennart & Bamieh, Omar, 2023. "What Drives Paternity Leave: Financial Incentives or Flexibility?," IZA Discussion Papers 15890, Institute of Labor Economics (IZA).
    6. Nabanita Datta Gupta & Jonas Jessen, 2023. "Maternity leave versus early childcare—What are the long-term consequences for children?," IZA World of Labor, Institute of Labor Economics (IZA), pages 438-438, May.
    7. Elizabeth Brainerd & Olga Malkova, 2023. "Maternity benefits and marital stability after birth: evidence from the Soviet Baltic republics," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(4), pages 2309-2345, October.
    8. Katrin Huber, 2019. "Changes in parental leave and young children’s non-cognitive skills," Review of Economics of the Household, Springer, vol. 17(1), pages 89-119, March.
    9. Ahammer, Alexander & Glogowsky, Ulrich & Halla, Martin & Hener, Timo, 2023. "The Parenthood Penalty in Mental Health: Evidence from Austria and Denmark," IZA Discussion Papers 16459, Institute of Labor Economics (IZA).
    10. Ahammer, Alexander & Halla, Martin & Schneeweis, Nicole, 2020. "The effect of prenatal maternity leave on short and long-term child outcomes," Journal of Health Economics, Elsevier, vol. 70(C).
    11. Houmark, Mikkel Aagaard & Jørgensen, Cecilie Marie Løchte & Kristiansen, Ida Lykke & Gensowski, Miriam, 2024. "Effects of extending paid parental leave on children’s socio-emotional skills and well-being in adolescence," European Economic Review, Elsevier, vol. 170(C).
    12. Wolfgang Frimmel & Martin Halla & Bernhard Schmidpeter & Rudolf Winter-Ebmer, 2022. "Grandmothers’ Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 57(5), pages 1645-1689.
    13. Canaan, Serena, 2022. "Parental leave, household specialization and children’s well-being," Labour Economics, Elsevier, vol. 75(C).
    14. Alena Bičáková & Klára Kalíšková, 2024. "Is longer maternal care always beneficial? The impact of a 4-year paid parental leave," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(2), pages 1-45, June.
    15. 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.
    16. Pruckner, Gerald J. & Stiftinger, Flora & Zocher, Katrin, 2025. "When women take over: Physician gender and health care provision," Journal of Health Economics, Elsevier, vol. 102(C).
    17. Krishna Regmi & Le Wang, 2025. "Baby steps to success? The impact of paid maternity leave on children’s long-term outcomes in the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 38(2), pages 1-34, June.
    18. Cronin, C.J.; & Harris, M. C.; & Ziebarth, N. R.;, 2024. "The Anatomy of U.S. Sick Leave Schemes:Evidence from Public School Teachers," Health, Econometrics and Data Group (HEDG) Working Papers 24/10, HEDG, c/o Department of Economics, University of York.
    19. Mette Goertz & Vibeke Myrup Jensen & Sarah Sander, 2023. "Daycare Enrollment Age and Child Development," CEBI working paper series 22-26, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).

    More about this item

    Keywords

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    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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