Do Family Values Shape the Pace of Return to Work after Childbirth?

Abstract

This paper evaluates the effect of a parental leave policy reform in Germany in 2007 -- aimed at incentivizing an earlier return to work -- on the return to work of mothers with different family values background. Using a regression discontinuity design and an epidemiological approach to family values, the findings suggest that the pace of return to work after childbirth is not independent of family values background. The paper finds that, firstly, the pre-reform pace of return to work was slower for mothers with traditional family background than for their counterparts with liberal family background. Secondly, the reform has accelerated the pace of return to work mainly for mothers with traditional family background, thus leading to overall convergence between mothers with different family values background. Importantly though, the magnitude of convergence differs across education levels. Mothers with vocational and -- to a lesser extent -- low education, display high levels of post-reform convergence with their counterparts with liberal family background. This is in stark contrast with the post-reform divergence on the pace of return to work experienced by highly educated mothers with different family values background. In other words, highly educated mothers with traditional family background do not react to the policy in a significant way, whereas those with liberal family background display a strong reaction. One explanation put forward by this paper is that education might be perceived differently depending on family values background. Mothers with traditional family background may use the educational system either as way to enhance their cultural investment or even as a marriage market, and therefore will not be very sensitive to changes in economic incentives. Instead, mothers with liberal family background may use the educational system as a way to enhance their human capital, therefore being more sensitive to changes in economic incentives.