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The Effects of Family Policy on Mothers' Labor Supply: Combining Evidence from a Structural Model and a Natural Experiment

Discussion Papers 1366, 41 S.

Johannes Geyer, Peter Haan, Katharina Wrohlich


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Published in: Labour Economics 36 (2015), 84-89


Parental leave and subsidized child care are prominent examples of family policies supporting the reconciliation of family life and labor market careers for mothers. In this paper, we combine different empirical strategies to evaluate the employment effects of these policies for mothers in Germany. In particular we estimate a structural labor supply model and exploit a natural experiment, i.e. the reform of parental leave benefits. By exploiting and combining the advantages of the different methods, i.e the internal validity of the natural experiment and the external validity of the structural model, we can go beyond evaluation studies restricted to one particular methodology. Our findings suggest that a combination of parental leave benefits and subsidized child care leads to sizable employment effects of mothers.

Johannes Geyer

Deputy Head in the Public Economics Department

Peter Haan

Head of Department in the Public Economics Department

Katharina Wrohlich

Head in the Gender Economics Department

JEL-Classification: J22;H31;C52
Keywords: Labor supply, parental leave benefits, childcare costs, structural model, natural experiment
Frei zugängliche Version: (econstor)