Causal Effects of Paternity Leave on Children and Parents

• Author: Lars J. Kirkebøen,Jon H. Fiva,Sara Cools
• DOI: http://doi.org/10.1111/sjoe.12113
• Published date: 01 July 2015
• Date: 01 July 2015

Scand. J. of Economics 117(3), 801–828, 2015

DOI: 10.1111/sjoe.12113

Causal Effects of Paternity Leave on

Children and Parents∗

Sara Cools

BI Norwegian Business School, NO-0442 Oslo, Norway

sara.cools@bi.no

JonH.Fiva

BI Norwegian Business School, NO-0442 Oslo, Norway

jon.h.fiva@bi.no

Lars J. Kirkebøen

Statistics Norway, NO-0033 Oslo, Norway

kir@ssb.no

Abstract

Reserving a share of the parental leave period for fathers is considered necessary in order

to induce fathers to take leave, and to increase men’s participation in child-rearing. We

investigate how a parental leave reform directed towards fathers affected leave-taking, and,

in turn, children’s and parents’ long-term outcomes. A paternal leave quota greatly increases

the share of men taking paternity leave. We find evidence that children’s school performance

improves as a result, particularly in families where the father has higher education than

the mother. We find no evidence that paternity leave counters the traditional allocation of

parents’ labor supply.

Keywords: Child development; labor supply; parental leave

JEL classification:I21; J13; J22; J24

I. Introduction

Paternity leave is often discussed as a policy measure to encourage greater

gender equality, both in the family and in the labor market. Politicians and

policymakers in Northern Europe are strong believers that paternity leave

∗We are grateful to Tarjei Havnes, Timo Hener, John Kennes, Shelly Lundberg, Kalle Moene,

Magne Mogstad, Hessel Oosterbeek, Mari Rege, Marte Rønning, Uta Sch¨

onberg, Ingeborg

Solli, Katharina Wrohlich, several seminar participants, and the referees for helpful comments

and suggestions. This paper is part of the research activities at the Centre of Equality, Social

Organization, and Performance (ESOP) at the Department of Economics, University of Oslo.

ESOP is supported by the Research Council of Norway through its Centres of Excellence

funding scheme, project number 179552.

CThe editors of The Scandinavian Journal of Economics 2015.

802 Causal effects of paternity leave on children and parents

strengthens women’s position in the labor market, reduces the gender wage

gap, and promotes bonding between children and fathers.1

Wishing to alter traditional patterns of household specialization, politi-

cians provide incentives to increase men’s involvement in the home. Even a

few weeks of paternity leave, the argument goes, might result in substantial

changes in the longer run.2Thus, Finland, Iceland, Norway, and Sweden

have all reserved a share of the parental leave for fathers. Similar proposals

are also popular – though highly debated – in other European countries.3

In this paper, we investigate how paternity leave affects a broad range of

outcomes using Norwegian register data. To handle the selection problem

and to learn about the causal effects of paternity leave on children and

parents, we use two parental leave reforms, implemented in 1992 and 1993.

A main feature of the 1993 reform was the introduction of a four-week

paternal quota. This reform caused a drastic change in fathers’ leave-taking

behavior. To isolate the effect of the paternal leave, we contrast the 1993

reform with the 1992 reform, which did not contain a paternal quota, but

which otherwise was similar.

Fathers who took parental leave after the implementation of the 1993

reform typically spent four weeks at home with the child. In itself, this

might seem like too short a period to have much impact as the child grows

older. Yet, spending four weeks as the main caregiver of an infant – and

preparing for this period from the time the child is born – might set off a

different dynamic both between parents as caregivers, and between the fa-

ther and his child. First, in the framework of Becker (1985), small changes

in initial conditions can result in substantial changes in the household’s

time allocation in the long run. Second, as an early childhood interven-

tion, self-productivity and strategic complementarities could multiply the

investment made by the father in his child during these weeks (Cunha

and Heckman, 2007). Third, the paternal quota, typically taken when the

child is about ten months old, coincides with a critical stage in the child’s

attachment to primary caregivers (Bowlby, 1969). In sum, both economic

and psychological theory give us reason to expect that these four weeks

1These views are articulated in a series of white papers: Likestilling for Likelønn (Stort-

ingsmelding nr. 6 (2010–2011)) in Norway, and Reformerad F¨

or¨

aldraf¨

ors¨

akring – K¨

arlek,

Omv˚

ardnad, Trygghet (SOU 2005:73) in Sweden.

2“To strengthen the father’s role in his child’s life, it is important for him to participate

in childcare during the child’s first year. A portion of the parental leave period should

therefore be reserved for the father.” (From the Norwegian Government’s long-term program

for 1990–1993 (Stortingsmelding nr. 4), our translation.)

3Germany, for example, introduced in 2007 a two-month paternity quota intended to provide

incentives for parents to share home and market work equally (Entwurf eines Gesetz zur

Einf¨

uhrung des Elterngeldes, Deutscher Bundestag Drucksache 16/1989, 20.06.2006).

CThe editors of The Scandinavian Journal of Economics 2015.