Increasing mothers’ labor supply is a key policy challenge in many OECD countries. Germany recently introduced a generous parental benefit that allows for strong consumption smoothing after childbirth and, by taking into account opportunity costs of childbearing, incentivizes working women to...

Using a uniquely assembled panel dataset, we estimate the impact of neighborhood and peer effects on female labor supply. Nonrandom sorting and unobserved heterogeneity at the individual and neighborhood levels make recovering these impact parameters more complicated in the absence of...