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Social Norms and Mothers' Labor Market Attachment – The Medium-run Effects of Parental Benefits

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  • Kluve, Jochen
  • Schmitz, Sebastian

Abstract

Increasing mothers' labor supply is a key policy challenge in many OECD countries. Germany recently introduced a generous parental benefit that allows for strong consumption smoothing after childbirth and, by taking into account opportunity costs of childbearing, incentivizes working women to become mothers and return to the labor force rapidly. Using a sharp regression discontinuity design, we estimate policy impacts for up to 5 years after childbirth and find significant and striking patterns. First, medium-run effects on mothers' employment probability are positive, significant and large, for some subgroups ranging up to 10 per cent. The effects are driven by gains in part-time but not full-time employment. We also find significant increases in working hours. Second, the probability of job continuity rises significantly, i.e. mothers return to their pre-childbirth employer at higher rates. Third, employers reward this return to work by raising job quality significantly and substantially. We argue that the policy generated a profound change in social norms: the new parental benefit defines an 'anchor', i.e. a societally preferred point in time at which mothers return to work after childbirth.

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  • Kluve, Jochen & Schmitz, Sebastian, 2014. "Social Norms and Mothers' Labor Market Attachment – The Medium-run Effects of Parental Benefits," Ruhr Economic Papers 481, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  • Handle: RePEc:zbw:rwirep:481
    DOI: 10.4419/86788545
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    Cited by:

    1. Geyer, Johannes & Haan, Peter & Wrohlich, Katharina, 2015. "The effects of family policy on maternal labor supply: Combining evidence from a structural model and a quasi-experimental approach," Labour Economics, Elsevier, vol. 36(C), pages 84-98.
    2. Anita Kottwitz & Anja Oppermann & C. Katharina Spiess, 2016. "Parental leave benefits and breastfeeding in Germany: effects of the 2007 reform," Review of Economics of the Household, Springer, vol. 14(4), pages 859-890, December.
    3. Claudia Olivetti & Barbara Petrongolo, 2017. "The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 205-230, Winter.
    4. Holger Stichnoth, 2020. "Short-run fertility effects of parental leave benefits: evidence from a structural model," Empirical Economics, Springer, vol. 59(1), pages 143-168, July.
    5. Welteke, Clara & Wrohlich, Katharina, 2019. "Peer effects in parental leave decisions," Labour Economics, Elsevier, vol. 57(C), pages 146-163.
    6. -, 2014. "Economic Survey of Latin America and the Caribbean 2014: Challenges to sustainable growth in a new external context," Estudio Económico de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37033 edited by Eclac, September.
    7. 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.
    8. Juliane Frederike Stahl & Pia Sophia Schober, 2018. "Convergence or Divergence? Educational Discrepancies in Work-Care Arrangements of Mothers with Young Children in Germany," Work, Employment & Society, British Sociological Association, vol. 32(4), pages 629-649, August.
    9. Bilal Nabeel Falah & Marcelo Bérgolo & Arwa Abu Hashhash & Mohammad Hattawy & Iman Saadeh, 2019. "The Effect of Labor-Demand Shocks on Women’s Participation in the Labor Force: Evidence from Palestine," Working Papers PMMA 2019-08, PEP-PMMA.
    10. -, 2014. "Estudio Económico de América Latina y el Caribe 2014: desafíos para la sostenibilidad del crecimiento en un nuevo contexto externo," Estudio Económico de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 36970 edited by Cepal, September.
    11. Bachmann, Ronald & Bechara, Peggy & Cim, Merve & Kramer, Anica, 2018. "Working women and labour market inequality. Research project for the Wilfried Martens Centre for European Studies: Final report - July 2018," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 195939, June.
    12. Stahl, Juliane Frederike & Schober, Pia Sophia, 2018. "Convergence or Divergence? Educational Discrepancies in Work-Care Arrangements of Mothers with Young Children in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32(4), pages 629-649.
    13. Homroy, Swarnodeep & Mukherjee, Shibashish, 2021. "The role of employer learning and regulatory interventions in mitigating executive gender pay gap," Journal of Corporate Finance, Elsevier, vol. 71(C).
    14. 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).
    15. Girsberger, Esther Mirjam & Hassani-Nezhad, Lena & Karunanethy, Kalaivani & Lalive, Rafael, 2023. "Mothers at work: How mandating a short maternity leave affects work and fertility," Labour Economics, Elsevier, vol. 84(C).
    16. Kümmerling, Angelika & Postels, Dominik & Slomka, Christine, 2017. "Zufriedenheit mit der Arbeitszeit - wie kann sie gelingen? Eine Analyse der Arbeitszeiten nach Geschlecht und Statusgruppen," Working Paper Forschungsförderung 054, Hans-Böckler-Stiftung, Düsseldorf.
    17. Kamila Cygan-Rehm & Daniel Kühnle & Regina T. Riphahn, 2017. "Love your Leave, Don't Leave your Love! Paid Parental Leave and Children's Living Arrangements," CESifo Working Paper Series 6319, CESifo.
    18. Bechara, Peggy & Kluve, Jochen & Tamm, Marcus, 2015. "Fiskalische Refinanzierungseffekte des Elterngeldes: Projektbericht zum Forschungsvorhaben des Bundesministeriums für Familie, Senioren, Frauen und Jugend," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 236529, June.
    19. Monica Costa Dias & Robert Joyce & Francesca Parodi, 2019. "The gender pay gap in the UK: children and experience in work," Carlo Alberto Notebooks 594, Collegio Carlo Alberto.

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    More about this item

    Keywords

    parental benefits; female labor supply; regression discontinuity;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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