Abstract
We evaluate the effect of an Austrian parental leave extension from the child’s first to its second birthday on long-term child outcomes. Exploiting a sharp birthday cutoff-based discontinuity in the eligibility for extended leave, we find that longer parental leave improves on average child health outcomes, but has no effect on the child’s labor market outcomes. When accounting for the counterfactual mode of care, we find significant gains in all outcomes for children for whom the reform most likely induced a replacement of informal childcare with maternal care. This highlights the importance of the counterfactual scenario in such evaluations.
- Parental leave
- formal childcare
- informal childcare
- child development
- child health
- maternal labor supply
- fertility
This article requires a subscription to view the full text. If you have a subscription you may use the login form below to view the article. Access to this article can also be purchased.