Peer Effects in Parental Leave Decisions

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper analyzes to what extent parental leave decisions of mothers with young children depend on the decisions made by their coworkers. The identification of peer effects, which are defined as indirect effects of the behavior of a social reference group on individual outcomes, bears various challenges due to correlated characteristics within social groups and endogenous group membership. We overcome these challenges by exploiting quasi-random variation in the costs of parental leave during a narrow window around a cutoff date, induced by a parental leave benefit reform in Germany. The reform encourages mothers to remain at home during the first year following childbirth. Administrative linked employeremployee panel data enable us to assign a peer group to all individuals who work in the same establishment and occupational group. While there is a growing literature on peer effects, few studies look at peer effects in the context of parental leave decisions. We argue, however, that mothers with young children are particularly susceptible to peer behavior at the workplace due to preferences for conformity with peer group behavior as well as the career-related uncertainty that mothers face. Our results suggest that maternal decisions regarding the length of parental leave are significantly influenced by coworker decisions, in particular in situations with high uncertainty. Terms of use: Documents in

The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries

“…These effects-which are amplified over time-are interpreted as evidence of transmission of information about costs and benefits of paternal leave, eventually leading to a redefinition of social norms about parents' roles. Welteke and Wrohlich (2016) highlight similar spillover effects in the take-up rate of parental leave among mothers following the 2007 German reform discussed above. Future research should continue looking for potential peer effects and network effects in other programs.…”

Parental leave policies and socio-economic gaps in child development: Evidence from a substantial benefit reform using administrative data

“…Moreover, we estimate the reform effects for parents immediately affected by the reform within the given institutional setting, our empirical strategy cannot capture reform effects within other institutional environments, or effects that unfold gradually over time, such as reform-related changes in social norms about maternal labour supply and paternal leave-taking (e.g. Kluve and Schmitz, 2017;Welteke and Wrohlich, 2016). For example, mothers may give birth at an older age when they are more strongly attached to the labour market, which may itself impact children.…”

Paid Parental Leave and Child Development: Evidence from the 2007 German Parental Benefit Reform and Administrative Data

“…While we are able to reliably estimate the reform effects for parents immediately affected by the reform, our empirical strategy cannot capture reform effects that unfold gradually over time, such as changes in social norms related to maternal labour supply and paternal leave taking (Kluve and Schmitz, 2014;Bergemann and Riphahn, 2015;Welteke and Wrohlich, 2016). For example, mothers may decide to give birth at a higher age when they are more strongly attached to the labour market, which may itself have consequences for children's development.…”

“…After these eight weeks, a substantial share of newly eligible mothers took unpaid parental leave within the first six months after childbirth before the reform (Bergemann and Riphahn, 2015;Welteke and Wrohlich, 2016). During this early phase following childbirth, the reform has largely substituted unpaid leave with paid leave.…”