Two Steps Forward - One Step Back? Evaluating Contradicting Child Care Policies in Germany

We apply a structural model of mothers' labor supply and child care choices to evaluate the effects of two childcare reforms in Germany that were introduced simultaneously in August 2013. First, a legal claim to subsidized child care became effective for all children aged one year or older. Second, a new benefit called 'Betreuungsgeld' came into effect that is granted to families who do not use public or publicly subsidized child care. Both reforms target children of the same age group and are unconditional on the parents' income or employment status, yet affect mothers' incentives for labor supply and child care choices in opposite directions. Our model facilitates estimating the joint reform impact as well as disentangling the individual effects of both policies. A comprehensive data set with information on labor supply, the use of and potential access restrictions to various child care arrangements provides the basis for the empirical analysis. We find the overall effect of both reforms to be small but positive as far as mother's labor supply and the use of formal care is concerned. The legal claim's positive impact on mothers' labor supply and the use of formal child care is largely offset by the negative effect on both outcomes resulting from the introduction of the 'Betreuungsgeld'

Effects of Early Childhood Intervention on Fertility and Maternal Employment: Evidence from a Randomized Controlled Trial

This paper presents the results of a randomized study of a home visiting program implemented in Germany for low-income, first-time mothers. A major goal of the program is to improve the participants' economic self-sufficiency and family planning. I use administrative data from the German social security system and detailed telephone surveys to examine the effects of the intervention on maternal employment, welfare benefits, and household composition. The study reveals that the intervention unintentionally decreased maternal employment and increased subsequent births. These results contradict those of previous studies from the United States, where home visiting programs successfully increased employment and decreased fertility. Analyzing the reason for the different results, suggests that the program interacts with low employment incentives and generous welfare state arrangements for disadvantaged mothers with young children in Germany

The Effect of Education on Fertility: Evidence from a Compulsory Schooling Reform

This study analyzes the effect of education on the number of children, childlessness, and the timing of the first birth. We use exogenous variation from a mandatory reform to compulsory schooling in West Germany to deal with the endogeneity of schooling. In contrast to studies for other developed countries, we find a significant negative effect of education on completed fertility. We attribute this finding to the particularly high opportunity costs of child-rearing in Germany

Parental leave benefit and differential fertility responses: evidence from a German reform

This paper examines the causal effects of a major change in the German parental leave benefits on fertility. I use the unanticipated reform of 2007 to assess how a move from a means-tested to an earnings-related benefit affects higher-order births. By using data from the Mikrozensus, I find that the reform significantly affected the timing of higher-order births. Overall, mothers “just” affected by the reform initially reduce subsequent childbearing and start to compensate by the end of the third year. The negative effects are largely driven by lowest-income mothers, who are now worse-off and do not display any catch-up effects

Intergenerational Effects of Education on Risky Health Behaviours and Long-Term Health

This paper estimates the causal effects of parental education on their children's risky health behaviours and health status. I study the intergenerational effects of a compulsory schooling reform in Germany after World War II. Implemented across federal states at different points in time, the reform increased the minimum number of school years from eight to nine. Instrumental variable estimates and difference-in-differences estimates reveal that increases in maternal schooling reduce children's probability to smoke and to be overweight in adolescence. The effects persist into adulthood, reducing chronic conditions that often result from unhealthy lifestyles. No such effects can be identified for paternal education. Increased investments in children's education and improvements in their peer environment early in life are important for explaining the effects. Changes in family income, family stability, fertility and parental health-related behaviours are less relevant empirically. The intergenerational effects of education on health and health-related behaviours exceed the direct effects. Studies neglecting the intergenerational perspective substantially understate the full causal effects