Love Your Leave, Don't Leave Your Love! Paid Parental Leave and Children's Living Arrangements
42 Pages Posted: 28 Feb 2017
Date Written: February 09, 2017
We examine how a German paid parental leave reform causally affected early childhood living arrangements. The reform replaced a means-tested benefit with a universal transfer paid out for a shorter period. Using a difference-in-differences design, we find that the reform increased the probability that a newborn lives with non-married cohabiting parents. This effect results from a reduced risk of single parenthood among women who gained from the reform. We reject the economic independence hypothesis and argue that the effects for reform winners are consistent with alternative hypotheses related to increased female financial attractiveness and increased paternal involvement in childcare.
Keywords: parental leave, living arrangements, marriage, cohabitation, single motherhood, child well-being, early childhood
JEL Classification: J120, J130, J180, I300
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