Identification strategy and policy reform
In 2007 Germany introduced a new system of paid parental leave. This reform applied to
all parents of children born on 1st of January 2007 or later and introduced a father quota.
Overall, families were eligible to 14 months of paid parental leave out of which two months were
reserved for the father and two months for the mother. The family would lose the two daddy
months if the father did not use them. Paid leave had to be taken during the first 14 months after
childbirth and parents might take leave consecutively or in parallel. Each parent taking paid
leave would have to take at least two months, i.e. it was not allowed that fathers took one month
only. This implies that the choice set of fathers was to take either (i) no leave, (ii) exactly two
months of leave or (iii) more than two months of leave, up to 12 months at most. The latter
required mothers to take less than 12 months of paid leave. While on parental leave parents
receive benefits replacing 67% of pre-childbirth net labor earning. Administrative data reveal
that the reform considerably increased the share of fathers taking parental leave. Before the
reform the share of fathers on leave was estimated to be no more than 3%. For fathers with
children born in 2007, i.e. the first cohort after the reform, the share was 15% and steadily
increased to 34% for fathers with children born in 2014 (Huebener et al. 2016). Most fathers
taking leave decide to take exactly two months of paid leave and few families share paid leave
equally between both parents.
RWI (2008) and Reich (2011) show that fathers’ take-up of leave is highly selective. The
probability of fathers’ leave-taking is higher for highly educated fathers, for older fathers, in
households where the mother was working before childbirth and in particular if mothers’ hours
of work were higher than fathers’ hours of work. This selectivity in leave-taking makes cross-
sectional comparisons of fathers with and without leave unlikely to reveal causal effects. A
In 2007 Germany introduced a new system of paid parental leave. This reform applied to
all parents of children born on 1st of January 2007 or later and introduced a father quota.
Overall, families were eligible to 14 months of paid parental leave out of which two months were
reserved for the father and two months for the mother. The family would lose the two daddy
months if the father did not use them. Paid leave had to be taken during the first 14 months after
childbirth and parents might take leave consecutively or in parallel. Each parent taking paid
leave would have to take at least two months, i.e. it was not allowed that fathers took one month
only. This implies that the choice set of fathers was to take either (i) no leave, (ii) exactly two
months of leave or (iii) more than two months of leave, up to 12 months at most. The latter
required mothers to take less than 12 months of paid leave. While on parental leave parents
receive benefits replacing 67% of pre-childbirth net labor earning. Administrative data reveal
that the reform considerably increased the share of fathers taking parental leave. Before the
reform the share of fathers on leave was estimated to be no more than 3%. For fathers with
children born in 2007, i.e. the first cohort after the reform, the share was 15% and steadily
increased to 34% for fathers with children born in 2014 (Huebener et al. 2016). Most fathers
taking leave decide to take exactly two months of paid leave and few families share paid leave
equally between both parents.
RWI (2008) and Reich (2011) show that fathers’ take-up of leave is highly selective. The
probability of fathers’ leave-taking is higher for highly educated fathers, for older fathers, in
households where the mother was working before childbirth and in particular if mothers’ hours
of work were higher than fathers’ hours of work. This selectivity in leave-taking makes cross-
sectional comparisons of fathers with and without leave unlikely to reveal causal effects. A
