Working Paper: CEPR ID: DP17073
Authors: Anna Raute; Andrea Weber; Galina Zudenkova
Abstract: A child's family structure is a fundamental determinant of future well-being, making it essential to understand how public policies affect the involvement of fathers. In this paper, we exploit a reform of the German parental leave system - which increased mother's income and reduced legal father's financial support burden - to measure the impact on the relationship contract choices of parents who were unmarried at conception. Based on detailed birth record data, we demonstrate that short-run reform incentives during the first period after birth nudge unmarried fathers into the long-term commitment of acknowledging paternity. This shift reduces single motherhood by 6% but leaves the share of marriages at birth constant. Moreover, the change in relationship contract choices is mostly driven by parents of boys. These findings are compatible with predictions from a model where parents choose between three types of relationship contracts based on the mother's and father's incomes and support obligations. Our results highlight the necessity of studying intermediate relationship contracts (i.e., between the extremes of marriage and single motherhood) to improve our understanding of potential risk groups among the rising number of children growing up outside of marriage.
Keywords: Paid Parental Leave; Family Structure; Paternity Establishment
JEL Codes: H42; I38; J12; J13; J16; J18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| German parental leave reform (J22) | share of children with legally established fathers (J12) |
| German parental leave reform (J22) | paternity acknowledgment (J12) |
| paternity acknowledgment (J12) | children with established paternity (J13) |
| German parental leave reform (J22) | paternity acknowledgment for boys (J12) |
| paternity acknowledgment for boys (J12) | children with established paternity for boys (J13) |
| German parental leave reform (J22) | likelihood of paternity acknowledgment (K36) |
| German parental leave reform (J22) | birth outcomes (J13) |