The New Parental Allowance and Parental Leave Act in Germany : Analysis of Potential Effects on the Fertility Rate and the Fertility Structure

This paper aims at estimating potential effects of the Parental Allowance and Parental Leave Act (2007) in Germany on the fertility rate, the timing and the spacing of births. First, theoretical models on the interaction between family policy and the fertility rate are analyzed. In addition, experiences from other European countries are evaluated. It is concluded that the new legislation is an important step towards a higher fertility rate and a shorter spacing of births, whereas the effect on the timing of births is ambiguous. Besides, it is likely to increase the female employment rate