Changes in parental leave and young children’s non-cognitive skills
This study examines the effect of substantial changes in parental leave regulations on the non-cognitive development of children aged between 0 and 3 years. I exploit a large and unanticipated parental leave reform in Germany as a natural experiment. Since the first of January 2007, the replacement of a means-tested by an earnings-related system led to a gain in benefits for wealthier families whereas needier parents receive a lower overall benefit amount than before the reform. I detect a significant negative effect of this change in the parental leave system on the socio-emotional development of newborns and it turns out that children from loser-families drive this effect. The parental leave reform does not have a significant impact on 2–3-year-olds’ skills and development on average and the difference between children from losers and winners does also not persist in the longer run. I only find suggestive evidence that an increase in benefits improves some skills of 2–3-year-olds if compared to those who experience reductions in benefits.
KeywordsChildren Family policy Parental leave Non-cognitive skills
JEL ClassificationJ13 J18 J22
This paper benefited greatly from the valuable advice provided by Stefan Bauernschuster. I also thank Ramona Molitor, Susanna Grundmann, Erwin Winkler and Anna Raute, as well as the participants of several seminars in Passau and of the EALE 2016, VfS 2015, ESPE 2015 and SSES 2015 conferences for their insightful comments. I am also grateful to two anonymous referees for their helpful suggestions. Helen Zeidler provided excellent research assistance.
Compliance with ethical standards
Conflict of interest
The author has received a conference subsidy for young academics from the Verein für Socialpolitik for presenting this paper at the ESPE in Izmir 2015. The author declares that she has no further conflict of interest.
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