Social differentials in speed-premium effects in childbearing in Sweden

In Sweden, parents receive a parental-leave allowance of a high percentage of their pre-birth salary for about a year in connection with any birth. (The percentage has changed over time, as has the period for which it is paid. For a birth that appears in 2005, parents get 80% of the salary for thirteen months.) If they space their births sufficiently closely, they avoid a reduction in the allowance caused by any reduced income earned between the births. The gain is popularly called a “speed premium”. After some precursors in legal practice, this rule was made statutory in 1980 and the “eligibility interval” was then set to 24 months. In 1986, it was extended to more attainable thirty months. In previous work we have displayed a corresponding speed-up effect in childbearing for Swedish-born women. This change in behavior is of general interest since it is clear evidence of a causal effect of a policy change on childbearing behavior. In the present paper, we study how this change in behavior was adopted in different social strata of the Swedish population. We examine whether the speed-up of childbearing differed by educational attainment and by country of origin, to see whether some social groups reacted faster or more strongly to the policy change than others. We cannot find any important difference in the reaction to the introduction of the “speed premium” between educational groups of Swedish-born parents. Similarly, we find no important difference in the mode of reaction between Swedish-born women and Nordic immigrants to the country. By contrast, immigrants from non-Nordic countries hardly seem to have reacted to the “speed premium”.