Abstract: This paper investigates the medium-term effects of Germany's recent parental benefit reform on the mothers' labour participation and modes of employment as well as marriage behaviour using a natural experiment. The new scheme led to a four percentage point higher labour participation rate three to four years after childbirth. Moreover, there is an increase in the share of part-time jobs, but not in precarious employment relations. Highly educated mothers with a large earned income before childbirth seem to disproportionally contribute to the improved labour market outcomes. Unmarried couples are under the new regulation less inclined to marry, which can be explained by interactions of the policy with joint income taxation.