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Can Financial Incentives Reduce the Baby Gap? Evidence from a Reform in Maternity Leave Benefits

Year: 2017

Type: report

Abstract: To assess whether earnings-dependent maternity leave positively impacts fertility and narrows the baby gap between high educated (high earning) and low educated (low earning) women, I exploit a major maternity leave benefit reform in Germany that considerably increases the financial incentives for higher educated and higher earning women to have a child.In particular, I use the large differential changes in maternity leave benefits across education and income groups to estimate the effects on fertility up to 5 years post reform.In addition to demonstrating an up to 22% increase in the fertility of tertiary educated versus low educated women, I find a positive, statistically significant effect of increased benefits on fertility, driven mainly by women at the middle and upper end of the education and income distributions.Overall, the results suggest that earnings-dependent maternity leave benefits, which compensate women commensurate with their opportunity cost of childbearing, could successfully reduce the fertility rate disparity related to mothers' education and earnings.

Source: National Bureau of Economic Research

DOI: 10.3386/w23793

Author: Anna Raute

Institutions: National Bureau of Economic Research, Harvard University, University of Mannheim

Language: English

Topic: Gender, Labor, and Family Dynamics

Subfield: Gender Studies

Field: Social Sciences

Domain: Social Sciences

SDGs: Reduced inequalities, Decent work and economic growth, Gender equality, No poverty

Open Access status: green

Funder: Studienstiftung des Deutschen Volkes

OpenAlex ID: W3122306142

Cites: 28

Cited by: 30

Related to: 10