“Can financial incentives reduce the baby gap?- Evidence from a reform in maternity leave benefits” (PDF)
Revise and Resubmit at Journal of Public Economics
(old title: “Do financial incentives affect fertility- Evidence from a reform in maternity leave benefits”)
This paper was presented with a CESifo Distinguished Affiliate Award in Employment and Social Protection 2016, a UWIN Best Paper Award on Gender Economics 2015 and a FEEM Award at the EEA 2014. Press Coverage: Corriere della Sera. For a slightly embarrassing interview after the EEA presentation, see http://www.youtube.com/watch?v=6tQKJKYLYnI, and a shorter interview by the Fundación Ramón Areces during the COSME 2016 workshop: https://www.youtube.com/watch?v=EobdBUFXBOE)
I study whether earnings dependent parental benefits have a positive impact on fertility, and whether they are successful at narrowing the baby gap between high educated (high earning) and low educated (low earning) women. I exploit a reform in parental leave benefits in Germany, which increased the financial incentives to have a child for higher educated and higher-earning women considerably, by up to 21,000 EUR. First, I find large discontinuous jumps in overall monthly birth rates nine months after the passing of the law. Second, I exploit the large differential changes in parental leave benefits across education and income groups to estimate the causal effect of parental leave benefits on fertility. I find a positive, statistically significant effect of an increase in benefits on fertility, which is mainly driven by women in the middle and upper-end of the education and income distribution. Fertility of tertiary educated women increases by 13% relative to low educated. My findings suggest that earnings dependent parental benefits, which compensate women for their opportunity cost of childbearing accordingly, might be a successful means to reduce the disparity in fertility rates with respect to mothers’ education and earnings.
“Who benefits from universal childcare? Estimating marginal returns to early childcare attendance” with Thomas Cornelissen, Christian Dustmann and Uta Schönberg (PDF)
Revise and Resubmit (2nd round) at Journal of Political Economy
In this paper, we examine the heterogeneous treatment effects of a universal child care (preschool) program in Germany by exploiting the exogenous variation in attendance caused by a reform that led to a large staggered expansion across municipalities. Drawing on unique administrative data from the full population of compulsory school entry examinations, we find that children with lower (observed and unobserved) gains are more likely to select into child care than children with higher gains. This pattern of reverse selection on gains is driven by unobserved family background characteristics: children from disadvantaged backgrounds are less likely to attend child care than children from advantaged backgrounds but have larger treatment effects because of their worse outcome when not enrolled in child care.
“From LATE to MTE: Alternative Methods for the Evaluation of Policy Interventions” with Thomas Cornelissen, Christian Dustmann and Uta Schönberg (PDF)
Labour Economics, 2016, Vol. 41, 47-60
This paper provides an introduction into the estimation of Marginal Treatment Effects (MTE). Compared to the existing surveys on the subject, our paper is less technical and speaks to the applied economist with a solid basic understanding of econometric techniques who would like to use MTE estimation. Our framework of analysis is a generalized Roy model based on the potential outcomes framework, within which we define different treatment effects of interest, and review the well-known case of IV estimation with a discrete instrument resulting in a local average treatment effect (LATE). Turning to IV estimation with a continuous instrument we demonstrate that the 2SLS estimator may be viewed as a weighted average of LATEs, and discuss MTE estimation as an alternative and more informative way of exploiting a continuous instrument. We clarify the assumptions underlying the MTE framework, its relation to the correlated random coefficients model, and illustrate how the MTE estimation is implemented in practice.
Selected Work in Progress
“Paid Parental leave benefits and Paternity Acknowledgement” with Andrea Weber
Note: For part of this project we are using information on out-of wedlock births and registered fathers on the regional level. Please email me if you are interested in a copy of this dataset.