Effects of Germany’s New Parental Leave Policy: Work-Family Reconciliation Patterns and Fertility of Highly Educated Families

In 2007, Germany introduced an income-related paid parental leave with an explicit incentive for fathers. This much noticed policy reform has several goals such as raising female labour market participation and gender equality, also it aims raising fertility. Five years after introduction of this paid parental leave is a good time to take stock and analyse the effects. Does this new policy affect fertility behaviour? How have female occupational patterns changed? Do parental leave effects differ from the experience of Northern European countries?
This paper goes into the matter by analysing both SOEP and Micro Census for the period 2003-2010. The combination of those data sets allows the use of both event history analyses (SOEP) and cross-sectional differentiations with high N (Micro Census) – combining the strengths of both potential German data sets. The results show effects regarding the different goals of this policy. Although there is no general effect of the reform on the transition rate to the 2nd child, we observe an increase of fertility for high educated women. The female labour market participation increases for mothers of toddlers. Additionally, the care participation of fathers increases. Finally, the findings of this German case study are discussed in the light of the current research on policy effects.