The Parental Leave Benefit Reform in Germany: Costs and Labour Market Outcomes of Moving towards the Scandinavian Model

Germany is known to have one of the lowest fertility rates among Western European countries and also relatively low employment rates of mothers with young children. Although these trends have been observed during the last decades, the German public has only recently begun discussing these issues. In order to reverse these trends, the German government recently passed a reform of the parental leave benefit system in line with the Scandinavian model. The core piece of the reform is the replacement of the existing means-tested parental leave benefit by a wage-dependent benefit for the period of one year. In this paper we simulate fiscal costs and expected labour market outcomes of this reform. Based on a micro-simulation model for Germany we calculate first-round effects, which assume no behavioural changes and second-round effects, where we take labour supply changes into account. Our results show that on average all income groups, couples and single households, benefit from the reform. The calculation of overall costs of the reform shows that the additional costs are moderate. As far as the labour market behaviour of parents is concerned, we find no significant changes of labour market outcomes in the first year after birth. However, in the second year, mothers increase their working hours and labour market participation significantly. Our results suggest that the reform will achieve one of its aims, namely the increase in the labour market participation of mothers with young children.female labour supply, parental leave, micro simulation study

Does Distance Determine Who Attends a University in Germany?

We analyze the role of distance from a university in the decision to attend higher education in Germany. Students who live near a university can avoid moving and the increased living expenses by commuting. Thus, transaction cost arguments would suggest that the greater the distance to the nearest university, the lower the participation in higher education. We analyse this hypothesis by combining data from the German Socio-Economic Panel Study (SOEP) with a database from the German Rectors' Conference on university postal codes. Based on a discrete time hazard rate model we show that distance to the next university at the time of completing high school significantly affects the decision to enrol in tertiary education. Controlling for many other socio-economic and regional variables, we find that 1 kilometre distance decreases the probability to enrol in higher education by 0.2 - 0.3 percentage pointsHigher education, distance to university, competing risk model

Pollution Exposure and Infant Health: Evidence from Germany

This paper examines the impact of outdoor and indoor pollution on children's health from birth until the age of three years in Germany. We use representative data from the German Socio-Economic Panel (SOEP), combined with five air pollution levels. These data come from the Federal Environment Agency and cover the years 2002-2007. Our work offers three important contributions. Firstly, we use accurate measures for five different pollutants (CO, NO2, SO2, O3, and PM10) on a (half-)hourly basis. Secondly, we are able to follow the effect of pollution exposure on a child's health during the first three years of life, accounting for time-invariant and unobserved neighborhood and mother-specific characteristics. Thirdly, we calculate different pollution intensity measures. Instead of relying solely on mean pollution levels, we are able to use (half-)hourly pollution levels as well as indoor pollution as measurements for the total latent pollution exposure. Our results suggest a significantly negative impact for some pollutants on infant health during early childhood. In comparison to outdoor pollution, indoor pollution seems to be more harmful directly after birth, while the relationship between indoor and outdoor pollution changes later in childhood. Since smoking is one source of producing carbon monoxide and thus affects child health negatively, our results further support the advice to parents of young children not to smoke.Indoor and outdoor pollution, health, early childhood

Obesity and Developmental Functioning Among Children Aged 2-4 Years

In developed countries, obesity tends to be associated with worse labor market outcomes. One possible reason is that obesity leads to less human capital formation early in life. This paper investigates the association between obesity and the developmental functioning of children at younger ages (2-4 years) than ever previously examined. Data from the German Socio-Economic Panel Study are used to estimate models of developmental functioning in four critical areas (verbal skills, activities of daily living, motor skills, and social skills) as a function of various measures of weight (including BMI and obesity status) controlling for various child and family characteristics. The findings indicate that, among boys, obesity is a significant risk factor for lagged development in verbal skills, social skills, and activities of daily living. Among girls, weight generally does not have a statistically significant association with these developmental outcomes. Further investigations show that the correlations exist even for those preschool children who spend no time in day care, which implies that the correlation between obesity and developmental functioning cannot be due to discrimination by teachers, classmates, or even day care providers.Obesity, human capital, children, child development, Germany, gender

Obesity and Developmental Functioning Among Children Aged 2-4 Years

In developed countries, obesity tends to be associated with worse labor market outcomes. One possible reason is that obesity leads to less human capital formation early in life. This paper investigates the association between obesity and the developmental functioning of children at younger ages (2-4 years) than ever previously examined. Data from the German Socio-Economic Panel Study are used to estimate models of developmental functioning in four critical areas (verbal skills, activities of daily living, motor skills, and social skills) as a function of various measures of weight (including BMI and obesity status) controlling for various child and family characteristics. The findings indicate that, among boys, obesity is a significant risk factor for lagged development in verbal skills, social skills, and activities of daily living. Among girls, weight generally does not have a statistically significant association with these developmental outcomes. Further investigations show that the correlations exist even for those preschool children who spend no time in day care, which implies that the correlation between obesity and developmental functioning cannot be due to discrimination by teachers, classmates, or even day care providers.Obesity, human capital, children, child development, Germany, gender

The Impact of Child and Maternal Health Indicators on Female Labor Force Participation after Childbirth: Evidence from Germany

This paper analyzes the influence of children's health and mothers' physical and mental wellbeing on female labor force participation after childbirth in Germany. Our analysis uses data from the German Socio-Economic Panel (SOEP) study, which enables us to measure children's health based on the occurrence of severe health problems including mental and physical disabilities, hospitalizations, and preterm births. Since child health is measured at a very young age, we can rule out any of the reverse effects of maternal employment on child health identified in US studies. Within a two-year time period, we investigate the influence of these indicators on various aspects of female labor force participation after childbirth, including continuous labor force participation in the year of childbirth and the transition to employment in the year following childbirth. Since the majority of women in Germany do not go back to work within a year after childbirth, we also investigate their intention to return to work, and the preferred number of working hours. We find that the child's severe health problems have a significant negative effect on the mothers' labor force participation and a significant positive effect on her preferred number of working hours, but that hospitalizations or preterm births have no significant effect. For the mothers' own health, we find a significant negative effect of poor mental and physical wellbeing on female labor force participation within a year of childbirth. To our knowledge, this is the first empirical study of this kind on data outside the US.Female labour supply, Childhealth, Well-being

The Impact of Child and Maternal Health Indicators on Female Labor Force Participation after Childbirth: Evidence for Germany

This paper analyzes the influence of children's health and mothers' physical and mental well-being on female labor force participation after childbirth in Germany. Our analysis uses data from the German Socio-Economic Panel (SOEP) study, which enables us to measure chil-dren's health based on the occurrence of severe health problems including mental and physi-cal disabilities, hospitalizations, and preterm births. Since child health is measured at a very young age, we can rule out any of the reverse effects of maternal employment on child health identified in US studies. Within a two-year time period, we investigate the influence of these indicators on various aspects of female labor force participation after childbirth, including continuous labor force participation in the year of childbirth and the transition to employment in the year following childbirth. Since the majority of women in Germany do not go back to work within a year after childbirth, we also investigate their intention to return to work, and the preferred number of working hours. We find that the child's severe health problems have a significant negative effect on the mothers' labor force participation and a significant positive effect on her preferred number of working hours, but that hospitalizations or preterm births have no significant effect. For the mothers' own health, we find a significant negative effect of poor mental and physical wellbeing on female labor force participation within a year of child-birth. To our knowledge, this is the first empirical study of this kind on data outside the US.Female labour supply, childhealth, well-being

Spite and Cognitive Skills in Preschoolers

Although spiteful preferences play a crucial role in the development of human large-scale cooperation, there is little evidence on spiteful behavior and its determinants in children. We investigate the relationship between children's cognitive skills and spiteful behavior in a sample of 214 preschoolers aged 5-6 and their mothers. Other-regarding behavior of both mothers and children is elicited through four simple allocation decisions. A key advantage of our study is that it is carried out in a household context. Therefore, we have information about both the child's and mother's cognitive and noncognitive skills as well as health and household characteristics. We find that higher cognitive skills are associated with more spiteful behavior in children. This relationship is even more pronounced among boys and possibly reflects differences in competitiveness. Moreover, we find further gender differences depending on the measure of cognitive skills and the degree of spite. These results shed light on the determinants of the development of other-regarding preferences in humans.Spite, other-regarding preferences, cognitive skills, child experiments, household survey studies

The Intergenerational Transmission of Health in Early Childhood

The prevalence and importance of children's physical health problems have been increasingly recognized in recent years. Physical health problems of children such as obesity, motor impairment and chronic diseases cause social costs. Further, they can lead directly to adult physical health problems, which cause additional social costs. This paper examines the intergenerational link and transmission of both maternal and paternal health on children's health in Germany. We investigate this issue using data from the German Socio-Economic Panel (SOEP), making particular use of the mother and child questionnaires. These data allow us to capture a broad set ofhealth measures: anthropometric, self-rated health and "more objective" health measures. The results indicate significant relationships between parental and child health in the first and third year of life. In order to take into account the endogeneity of parental health, we estimate fixed effect models. Overall, we find, controlling for parental income, education and family composition, that parents who experience poor health have children with significantly poorer health. For example, the father's bodymass index (BMI) is a predictor for their children's BMI. Mothers who consider their health as good, have also healthier children.Intergenerational transmission, child health, parental health, early childhood