Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Bergen, Department of Economics

No 17/17: Parental Investments in Early Life and Child Outcomes. Evidence from Swedish Parental Leave Rules

Rita Ginja (), Jenny Jans () and Arizo Karimi ()
Additional contact information
Rita Ginja: University of Bergen, Department of Economics, Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
Jenny Jans: Department of Statistics, Uppsala University
Arizo Karimi: Department of Economics, Uppsala University

Abstract: We study how parental resources early in life affect children’s health and education exploiting the so-called speed premium (SP) in the Swedish parental leave system. The SP grants mothers higher parental leave benefits for the subsequent child without re-establishing eligibility through pre-birth market work if the two births occur within a pre-specified interval. This allow us to use a Regression Discontinuity framework. We find that the SP improves the educational outcomes of the first-born child, but not of the second-born. Impacts are driven by a combination of a positive income shock, and substitution from informal care to maternal time.

Keywords: Parental leave; earnings; time investments; child outcomes

JEL-codes: J13; J18; J22

71 pages, October 29, 2017

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