Recent evidence documents that (a) parenthood lowers women’s earnings in the long

run and (b) the income loss due to children explains a large part of the gender inequality in earnings. Combining German administrative data ranging from 1949 to 2015 with quasi-experimental variation, we study the dynamic impacts of parental leave policies on women’s earnings trajectories. In the first part of the paper, we confirm the substantial and persistent effects of parenthood on mother’s careers: Due to children, mothers earn roughly 55% less compared to fathers or women without children, even ten years after birth. Furthermore, the child-related earnings gap increased substantially from the 1950s to the early 2000s. In the second part, we exploit a dynamic regression discontinuity design to demonstrate that a large share of this increase in eqrnings gaps can be explained by a sequence of parental leave reforms.

Does public policies affect norms in society? Traditionally, economists have analyzed public policies almost exclusively through their effect on (economic) incentives, but in the context of child rearing, incentives appear to explain only a minor part of the behavior of parents. In this ongoing project, we ask to what extent earmarked leave affects parental norms, preferences and attitudes towards gender equality in the short and long run? Whether earmarked leave alleviates non-standard constrains such as concerns about breaking social norms and perceived career costs of leave? And whether earmarked leave imposes costs on parents due to, e.g., less flexibility in the parental leave system? We address these questions by combining rich register data with a population wide survey of beliefs and perceptions about gender norms and parental leave of new parents running across a two-year window around the introduction of earmarked leave in Denmark in August 2022.

Using Austrian and Danish administrative data, we examine the impacts of parenthood on mental health equality. Parenthood imposes a greater mental health burden on mothers than on fathers. It creates a long-run gender gap in antidepressant prescriptions of about 93.2% (Austria) and 64.8% (Denmark). Further evidence suggests that these parenthood penalties in mental health are unlikely to reflect differential help-seeking behavior across the sexes or the biological effects of giving birth to a child. Instead, they seem to mirror the psychological effects of having, raising, and investing in children. Supporting this interpretation, matched adoptive mothers (who do not experience the biological impacts of childbirth) also encounter substantial parenthood penalties. Moreover, mothers who invest more in childcare (by taking extended maternity leave in quasi-experimental settings) are more likely to face mental health problems.

Optimal parental leave benefit design requires understanding how different parental leave parameters impact individual behavior, costs, and welfare. Using administrative data from Italy, this paper leverages a unique environment in which women, after childbirth, can choose between work, lower benefits with job protection, and higher benefits without job protection. When cash benefits become more generous, many mothers choose to forgo job protection and substitute out of the standard parental leave program. While this brings them greater financial security in the short run, it drives long-lasting declines in employment and earnings, most of which occur after the benefits are exhausted. Using a revealed preference approach, I find that mothers attribute a significant value to short-term transfers after childbirth