Germany is known to have one of the lowest fertility rates among Western European countries and also relatively low employment rates of mothers with young children. Although these trends have been observed during the last decades, the German public has only recently begun discussing these...

This paper examines the effects of a substantial change in publicly funded paid parental leave in Germany on child development and socio-economic development gaps. For children born before January 1, 2007, parental leave benefits were means-tested and paid for up to 24 months after childbirth....