Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2009:14: The duration of paid parental leave and children’s scholastic performance

Qian Liu () and Oskar Nordström Skans ()
Additional contact information
Qian Liu: Department of Economics, Uppsala University, Postal: P O Box 513, SE-751 20 Uppsala, Sweden
Oskar Nordström Skans: IFAU - Institute for Labour Market Policy Evaluation, Postal: P O Box 513, SE-751 20 Uppsala, Sweden

Abstract: We study how the duration of paid parental leave affects the accumulation of cognitive skills among children. We use a reform which extended parental leave benefits from 12 to 15 months for Swedish children born after August 1988 to evaluate the effects of prolonged parental leave on children’s test scores and grades at age 16. We show that, on average, the reform had no effect on children’s scholastic performance. However, we do find positive effects for children of well-educated mothers, a result that is robust to a number of different specifications. We find no corresponding heterogeneity relative to parental earnings or fathers’ education, or relative to other predictors of child performance. We find no effects on intermediate outcomes such as mothers’ subsequent earnings, child health, parental fertility, divorce rates, or the mothers’ mental health. Overall the results suggest positive causal interaction effects between mothers’ education and the amount of time mothers spend with their children. Since the institutional context is one in which the alternative is subsidized day care, the results imply that subsidizing longer parental leave spells rather than day care reinforce the relationship between maternal education and school outcomes.

Keywords: Maternal employment; Education; Human capital; Cognitive skills

JEL-codes: I21; J13; J24

39 pages, June 9, 2009

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