Do Family Policies Reduce Gender Inequality? Evidence from 60 Years of Policy Experimentation

Abstract

Do family policies reduce gender inequality in the labor market? We contribute to this debate by investigating the joint impact of parental leave and child care, using administrative data covering the labor market and birth histories of Austrian workers over more than half a century. We start by quasi-experimentally identifying the causal effects of all family policy reforms since the 1950s on the full dynamics of male and female earnings. We then map these causal estimates into a decomposition framework a la Kleven, Landais and Søgaard (2019) to compute counterfactual gender gaps. Our results show that the enormous expansions of parental leave and child care subsidies have had virtually no impact on gender convergence.