The Impact of a Cash Benefit Reform on Parents’ Labour Force Participation.

Abstract

This paper evaluates the impact of a recent Norwegian family policy reform. The reform provides benefits of up to NOK 3000 per month to all families with 1-3 year old children, who do not utilise state subsidised day care centres. We investigate the reform’s effect on parents’ labour force participation. Our findings suggest that, on average, women’s labour force participation decreases and specialisation of work between couples increases after the reform. When we evaluate the reform’s impact in association with women’s schooling we find that the decrease in the labour force participation of mothers who have university level schooling is larger as compared with mothers who have less than university schooling.Public policy; Cash benefits; Specialisation