The Effect of Expansions in Maternity Leave Coverage on Children's Long-Term Outcomes

50 Pages Posted: 11 Aug 2008  

Christian Dustmann

University College London; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR)

Uta Schönberg

University of Rochester; IZA Institute of Labor Economics

Abstract

This paper evaluates the impact of three major expansions in leave coverage in Germany on the long-run education and labor market outcomes of children. Evaluation of three policy reforms as opposed to a single reform enables us to analyze whether the impact of paid leave differs from that of unpaid leave, and whether an expansion of a relatively short leave period is more beneficial to child development than an expansion of an already long leave period. Our empirical analysis combines two large administrative data sources on wages, unemployment, and school outcomes. We identify the causal impact of the reforms by comparing outcomes of children born shortly before and shortly after a change in maternity leave legislation, and therefore require substantially weaker assumptions for identification than existing studies. We find little support for the hypothesis that an expansion in maternity leave legislation improves children's outcomes. Given the precision of our estimates, we can statistically rule out the hypothesis that the expansion in paid leave from 2 to 6 (unpaid leave from 18 to 36) months raised wages (attendance at high track schools) by more than 0.3 % (0.1 %).

Keywords: child development, maternity leave

JEL Classification: J13, H52, J2

Suggested Citation

Dustmann, Christian and Schönberg, Uta, The Effect of Expansions in Maternity Leave Coverage on Children's Long-Term Outcomes. IZA Discussion Paper No. 3605. Available at SSRN: https://ssrn.com/abstract=1214910 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Christian Dustmann (Contact Author)

University College London ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom
+44 20 7679 5832 (Phone)
+44 20 7916 2775 (Fax)

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Uta Schönberg

University of Rochester ( email )

Rochester, NY 14627
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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