The Impact of Family Friendly Workplaces on Satisfaction and Work

This paper provides novel evidence on the effect of family-friendly firm policies on satisfaction and working time of parents. The focus of this study is on two specific firm policies: Childcare support and flexible working schedules. We exploit the fact that since the mid 2000s an increasing share of employers react to their employees' needs by offering a family-friendly work environment. These changes over time allow us to identify causal effects of the two family-friendly policies. Identification is based on a difference-in-differences strategy in a panel dataset on families with young children in Germany (FiD). The model is combined with matching to decrease potential bias arising from observable factors correlated with the offer of family-friendly policies and the change in the considered outcomes. We find that for mothers, childcare support strongly increases satisfaction related to childcare and additionally raises life and job satisfaction. Particularly middle and lower educated mothers increase their working time when childcare support is offered. The effects are mainly driven by immediate use of childcare support. Flexible working schedules only affect mothers' job satisfaction, but do not seem to change family related satisfaction and working time. Fathers show nearly no reactions to either childcare support or flexible working schedules. Childcare support seems to be a truly family-friendly practice and valued by mothers, while this is not so clear for flexible working schedules.