What Linear Estimators Miss: Re-Examining the Effects of Family Income on Child Outcomes

This paper uses a rich Norwegian dataset to re-examine the causal relationship between family income and child outcomes. Motivated by theoretical predictions and OLS results that suggest a nonlinear relationship, we depart from previous studies in allowing the marginal effects on children’s outcomes of an increase in family income to vary across the income distribution. Our nonlinear IV and fixed-effect estimates show an increasing, concave relationship between family income and children's educational attainment and IQ. The linear estimates, however, suggest small, if any, effect of family income, because they assign little weight to the large marginal effects at the lower part of the income distribution.instrumental variables estimation, fixed effects estimation, nonlinearities, child development, family income, linear models

A Flying Start? Maternity Leave Benefits and Long Run Outcomes of Children

We study the impact on children of increasing maternity leave benefits using a reform that increased paid and unpaid maternity leave in Norway in July 1977. Mothers giving birth before this date were eligible only for 12 weeks of unpaid leave, while those giving birth after were entitled to 4 months of paid leave and 12 months of unpaid leave. This increased time with the child led to a 2.7 percentage points decline in high school dropout and a 5% increase in wages at age 30. For mothers with low education we find a 5.2 percentage points decline in high school dropout and an 8% increase in wages at age 30. The effect is especially large for children of those mothers who, prior to the reform, would take very low levels of unpaid leave.maternity leave, children's outcomes

A flying start? Long term consequences of maternal time investments in children during their first year of life

We study the impact of increasing the time that the mother spends with her child in the first year of her life. In particular, we examine a reform that increased paid and unpaid maternity leave entitlements in Norway. In response to this reform, maternal leave increased on average by 4 months and family income was unaffected. We find that this increase in maternal time with the child led to a 2.7 percentage points decline in high school dropout rates, going up to 5.2 percentage points for those whose mothers have less than 10 years of education. This effect is especially large for children of mothers who, in the absence of the reform, would take very low levels of unpaid leave. Finally, there is a weak impact on college attendance. The results also suggest that much of the impact of early time with the child is at low levels of maternal education.

Your Place or Mine? On the Residence Choice of Young Couples in Norway

Norwegian registry data is used to investigate the location decisions of a full population cohort of young adults as they complete their education, establish separate households and form their own families. We find that the labor market opportunities and family ties of both partners affect these location choices. Surprisingly, married men live significantly closer to their own parents than do married women, even if they have children, and this difference cannot be explained by differences in observed characteristics. The principal source of excess female distance from parents in this population is the relatively low mobility of men without a college degree, particularly in rural areas. Despite evidence that intergenerational resource flows, such as childcare and eldercare, are particularly important between women and their parents, the family connections of husbands appear to dominate the location decisions of less-educated married couples.intergenerational proximity, marriage, location decisions

A Flying Start? Long Term Consequences of Maternal Time Investments in Children During Their First Year of Life

We study the impact on children of increasing the time that the mother spends with her child in the first year by exploiting a reform that increased paid and unpaid maternity leave in Norway. The reform increased maternal leave on average by 4 months and family income was unaffected. The increased time with the child led to a 2.7 percentage points decline in high school dropout. For mothers with low education we find a 5.2 percentage points decline. The effect is also especially large for children of mothers who, prior to the reform, would take very low levels of unpaid leave.adult outcomes, time with mother, maternity leave

Lifting the Burden Formal Care of the Elderly and Labor Supply of Adult Children

In this paper, we use a 1998 reform in the federal funding of local home-based care for the elderly in Norway to examine the effects of formal care expansion on the labor supply decisions and mobility of middle-aged children. Our main finding is a consistent and significant negative impact of formal care expansion on work absences longer than 2 weeks for the adult daughters of single elderly parents. This effect is particularly strong for daughters with no siblings, and this group is also more likely to exceed earnings thresholds after the reform. We find no impacts of the reform on daughter's mobility or parental health, and no effects on adult sons. Our results provide evidence of substitution between formal home-based care and informal care for the group that is most likely to respond to the parent's need for care � adult daughters with no siblings to share the burden of parental care. These results also highlight the importance of labor market institutions that provide flexibility in enabling women to balance home and work responsibilities

Replication data for: Care or Cash? The Effect of Childcare Subsidies on Student Performance

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Replication data for: What Is the Case for Paid Maternity Leave?

Dahl, Gordon B., Loken, Katrine V., Mogstad, Magne, and Salvanes, Kari Vea, (2016) "What Is the Case for Paid Maternity Leave?." Review of Economics and Statistics 98:4, 655-670