Fertility, Maternal Well-Being, and Parental Leave Bene Fits: Evidence from the 2007 Reform in Germany

Fugba Zeydanli , Martin Luther University of Halle
Semih Tumen, University of Chicago and the Central Bank of Turkey

Maternal well-being is a critical determinant of early human capital formation. Therefore, policies that foster maternal well-being can improve the quality of early childhood investments. This paper investigates (i) how female life satisfaction responds to having a child and (ii) how that response is affected by changes in the generosity of parental leave programs. Using the German Socio-Economic Panel (SOEP) within a quasi-experimental setting, we explore the empirical relationship between fertility, maternal well-being, and parental leave benefi ts. First, we use multiple births as an instrument to estimate the impact of fertility on female well-being and fi nd that having a child has a modest positive impact on female well-being. Next, we use the 2007 German parental leave reform to estimate how the positive relationship between fertility and female well-being responds to the generosity of parental leave bene fits. Based on an empirical strategy embedding the multiple births instrument into a difference-in-differences framework, we find that the 2007 reform has strengthened the positive link between fertility and female well-being in Germany. We document signi cant ethnic and regional heterogeneities in the results.

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 Presented in Session P3. Poster Session Migration, Economics, Environment, Methods, History and Policy