Parental leave regulations, mothers' labor force attachment and fathers' childcare involvement: evidence from a natural experiment

In 2007, Germany implemented a generous parental leave regulation in order to make parenthood more attractive and more compatible with a working career, especially for mothers. We evaluate the reform using a natural experiment that compares outcomes of parents with children born shortly after and before the coming into effect of the law, and find a significant decrease in mothers' employment probability during the 12 months after giving birth, and an increase in mothers' employment probability after the transfer expires. The implementation of two daddy months is currently not reflected in significant changes in fathers' time devoted to childcare.