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Parental benefits improve parental well-being: evidence from a 2007 policy change in Germany

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  • Mikko Myrskylä

    (Max Planck Institute for Demographic Research, Rostock, Germany)

  • Rachel Margolis

Abstract

Family policies aim to influence fertility and labor force participation, and support families. However, often only fertility and labor supply are considered in policy evaluations. For example, the 2007 extension of parental leave benefits in Germany is generally considered unsuccessful because changes in fertility and labor force participation were modest. However, parental wellbeing is also important, in itself and as a determinant of child well-being. This paper is the first to consider the effect of parental leave policies on parental well-being. We analyze the German 2007 parental benefits reform and find that the extension of benefits strongly increased parental well-being around the birth of a child. The effect is observed for first and second births and for various sub-populations. A placebo test using data from Britain where there was no policy change supports the causal interpretation. Our results cast the success of the German 2007 policy change in new light. Parental leave benefits have an important direct impact on parental wellbeing.

Suggested Citation

  • Mikko Myrskylä & Rachel Margolis, 2013. "Parental benefits improve parental well-being: evidence from a 2007 policy change in Germany," MPIDR Working Papers WP-2013-010, Max Planck Institute for Demographic Research, Rostock, Germany.
    • Handle: RePEc:dem:wpaper:wp-2013-010
    DOI: 10.4054/MPIDR-WP-2013-010
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    Cited by:

    1. Rachel Margolis & Mikko Myrskylä, 2015. "Parental Well-being Surrounding First Birth as a Determinant of Further Parity Progression," Demography, Springer;Population Association of America (PAA), vol. 52(4), pages 1147-1166, August.
    2. Petra Rattay & Elena von der Lippe, 2020. "Association between Living with Children and the Health and Health Behavior of Women and Men. Are There Differences by Age? Results of the “German Health Update” (GEDA) Study," IJERPH, MDPI, vol. 17(9), pages 1-19, May.

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    More about this item

    Keywords

    Germany; parenthood;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • Z0 - Other Special Topics - - General

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