Cash-Benefit Policy and Childbearing Decisions in Norway

Abstract

This report analyzes Norway's childcare cash-benefit policy and its relation to fertility decision making among Norwegian women with respect to having a second child. Using information from Norwegian registers, which include information on education and birth timing, the study's focus was on the childcare cash-benefit policy introduced in 1998. Both acceptance of childcare cash benefits and subsequent fertility timing were strongly influenced by women's educational attainment. Norwegian couples chose different strategies concerning work, childcare, and childbearing. Those individuals who were associated with a home scenario, taking the maximum length of cash benefits, transitioned more quickly to a second birth than did others. In contrast, those individuals who were associated with a work scenario, taking none of the cash benefits, proceeded much later, whereas those associated with a mixed scenario, taking cash benefits for a shorter period, were less likely to have a second birth in the near-term but more likely later on. Mixed-scenario couples may have returned to work as a means to reestablish eligibility for parental leave benefits before having a second birth. Whereas the policy appears to have accelerated birth timing, it is not clear whether the policy has increased overall fertility levels.