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

Johannes Geyer (), Peter Haan and Katharina Wrohlich ()

No 645, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: 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.Keywords: labor supply, parental leave benefits, childcare costs, structural model, natural experiment

JEL-codes: H31 J22 C52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dem, nep-eur, nep-lab and nep-ltv
Date: 2014
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