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Peer Effects in Parental Leave Decisions

Author

Listed:
  • Clara Welteke
  • Katharina Wrohlich
Abstract
This paper analyzes to what extent parental leave decisions of mothers with young children depend on the decisions made by their coworkers. The identification of peer effects, which are defined as indirect effects of the behavior of a social reference group on individual outcomes, bears various challenges due to correlated characteristics within social groups and endogenous group membership. We overcome these challenges by exploiting quasi-random variation in the costs ofparental leave during a narrow window around a cutoff date, induced by a parental leave benefit reform in Germany. The reform encourages mothers to remain at home during the first year following childbirth. Administrative linked employer-employee panel data enable us to assign a peer group to all individuals who work in the same establishment and occupational group. While there is a growing literature on peer effects, few studies look at peer effects in the context ofparental leave decisions. We argue, however, that mothers with young children are particularly susceptible to peer behavior at the workplace due to preferences for conformity with peer group behavior as well as the career-related uncertainty that mothers face. Our results suggest that maternal decisions regarding the length of parental leave are significantly influenced by coworker decisions, in particular in situations with high uncertainty.

Suggested Citation

  • Clara Welteke & Katharina Wrohlich, 2016. "Peer Effects in Parental Leave Decisions," Discussion Papers of DIW Berlin 1600, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1600
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    Cited by:

    1. Claudia Olivetti & Barbara Petrongolo, 2017. "The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 205-230, Winter.
    2. Paule-Paludkiewicz, Hannah, 2024. "Does the right to work part-time affect mothers' labor market outcomes?," Discussion Papers 12/2024, Deutsche Bundesbank.
    3. Maria De Paola & Roberto Nisticò & Vincenzo Scoppa, 2024. "Workplace Peer Effects in Fertility Decisions," CSEF Working Papers 714, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    4. Corinna Frodermann & Katharina Wrohlich & Aline Zucco, 2020. "Parental Leave Reform and Long-Run Earnings of Mothers," Discussion Papers of DIW Berlin 1847, DIW Berlin, German Institute for Economic Research.
    5. Paule-Paludkiewicz, Hannah, 2020. "Does the Right to Work Part-Time Affect Mothers' Labor Market Outcomes?," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224556, Verein für Socialpolitik / German Economic Association.
    6. Wrohlich, Katharina & Zucco, Aline, 2023. "15 Jahre Elterngeld: Auswirkungen und Reformoptionen," Working Paper Forschungsförderung 281, Hans-Böckler-Stiftung, Düsseldorf.
    7. Huebener, Mathias & Kuehnle, Daniel & Spiess, C. Katharina, 2019. "Parental leave policies and socio-economic gaps in child development: Evidence from a substantial benefit reform using administrative data," Labour Economics, Elsevier, vol. 61(C).
    8. Claudia Olivetti & Barbara Petrongolo, 2017. "The Economic Consequences of Family Policies: Lessons from a Century of Legislation," Working Papers 811, Queen Mary University of London, School of Economics and Finance.
    9. Jessen, Jonas, 2022. "Culture, children and couple gender inequality," European Economic Review, Elsevier, vol. 150(C).
    10. Averkamp, Dorothée, 2024. "The Gender Wage Gap, Labor-Market Experience, and Family Choices: Lessons from East Germany?," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302347, Verein für Socialpolitik / German Economic Association.
    11. Ulrike Unterhofer & Katharina Wrohlich, 2017. "Fathers, Parental Leave and Gender Norms," Discussion Papers of DIW Berlin 1657, DIW Berlin, German Institute for Economic Research.
    12. Wrohlich, Katharina & Unterhofer, Ulrike, 2017. "External Effects of 'Daddy Months': How Fathers' Parental Leave Changes Social Norms," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168297, Verein für Socialpolitik / German Economic Association.
    13. Davide Dottori & Francesca Modena & Giulia Martina Tanzi, 2023. "Measuring peer effects in parental leaves: evidence from a reform," Temi di discussione (Economic working papers) 1399, Bank of Italy, Economic Research and International Relations Area.
    14. Frodermann, Corinna & Wrohlich, Katharina & Zucco, Aline, 2023. "Parental Leave Policy and Long-run Earnings of Mothers," Labour Economics, Elsevier, vol. 80(C).
    15. Chesney, Alexander J., 2022. "Should I get a master’s degree?," Economics of Education Review, Elsevier, vol. 91(C).
    16. Magnus Carlsson & Abdulaziz Abrar Reshid, 2022. "Co‐worker peer effects on parental leave take‐up," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(4), pages 930-957, October.
    17. Zimmert, Franziska & Zimmert, Michael, 2020. "Paid parental leave and maternal reemployment: Do part-time subsidies help or harm?," Economics Working Paper Series 2002, University of St. Gallen, School of Economics and Political Science.
    18. Janna Bergsvik & Agnes Fauske & Rannveig K. Hart, 2020. "Effects of policy on fertility. A systematic review of (quasi)experiments," Discussion Papers 922, Statistics Norway, Research Department.
    19. Gordon Dahl & Katrine Loken, 2024. "Families, Public Policies, and the Labor Market," RF Berlin - CReAM Discussion Paper Series 2423, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    20. Mathias Huebener & Daniel Kuehnle & C. Katharina Spiess, 2017. "Paid Parental Leave and Child Development: Evidence from the 2007 German Parental Benefit Reform and Administrative Data," Discussion Papers of DIW Berlin 1651, DIW Berlin, German Institute for Economic Research.

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    More about this item

    Keywords

    Peer effects; social interaction; labor supply; family policy;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation

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