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Earnings-related parental leave benefits and subjective well-being of young mothers: evidence from a German parental leave reform

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  • Miriam Maeder

Abstract

This study investigates the causal effect of earnings-related parental leave benefits (Elterngeld) on subjective well-being of young mothers. The new subsidy was introduced in 2007, and replaced a former means-tested benefit (Erziehungsgeld). The reform changed the total amount of benefits as well as the duration of pay. By construction of the reform, the change in benefits differs across population subgroups, depending on their eligibility for the former means-tested benefit. The reform also introduced incentives for paternal leave taking. Income effects, fathers’ involvement, and social norms constitute potential channels through which the reform affects well-being. Using a regression discontinuity design, I find remarkable heterogeneities in the response to the reform. While subjective well-being of West German mothers increases, East German mothers experience decreasing life satisfaction.

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  • Miriam Maeder, 2014. "Earnings-related parental leave benefits and subjective well-being of young mothers: evidence from a German parental leave reform," Working Papers 148, Bavarian Graduate Program in Economics (BGPE).
    • Handle: RePEc:bav:wpaper:148_maeder
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    Cited by:

    1. Katrin Huber, 2015. "Moving to an earnings-related parental leave system – do heterogeneous effects on parents make some children worse off?," Working Papers 160, Bavarian Graduate Program in Economics (BGPE).
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    More about this item

    Keywords

    Elterngeld; paid parental leave; well-being; life satisfaction;
    All these keywords.

    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
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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