Graduation Year

2018

Document Type

Dissertation

Degree

Ph.D.

Degree Name

Doctor of Philosophy (Ph.D.)

Degree Granting Department

Economics

Major Professor

Andrei Barbos, Ph.D.

Committee Member

Padmaja Ayyagari, Ph.D.

Committee Member

Joshua Wilde, Ph.D.

Committee Member

James Cavendish, Ph.D.

Keywords

family allowances, child development, fertility, maternity leave

Abstract

This dissertation consists of three chapters which examine family-friendly reforms, child planning or children’s early-age outcomes. The following are the titles of the chapters of the present dissertation:

  • CHAPTER 1: Are Parents and Grandparents Substitutes or Complements? The Effect of Parental and Grandparental Supervision Time Investment on Children’s Early-Age Development.
  • CHAPTER 2: The Effect of Family Welfare Support on the Likelihood of Having Another Child and Parents’ Labor Supply.
  • CHAPTER 3: The Effect of Maternity Leave Expansions on Fertility Intentions: Evidence from Switzerland.

Chapter 1 uses evidence from Scotland to examine the effect of grandparents’ childcare provision relative to the effect of parents’ time input on children’s cognitive, social and behavioral development at an early age. We construct a model of skills and knowledge accumulation, taking into account the time investment in the child since birth, and empirically test the hypothesis that both grandparents’ and parents’ supervision time influence different aspects of early-age child development. The findings provide evidence of complementarity between parental and grandparental involvement in the child-rearing process. Specifically, while parents’ supervision time has a larger impact on children’s social and behavioral development than an additional hour spent with grandparents, the grandparents’ effect on children’s vocabulary enhancement is larger than that of the parents. These results are consistent with the findings of the psychology literature that not only parents but also other relatives and people children socialize with determine children’s development at an early age. Our findings imply a beneficial role of grandparents, and provide a strong argument in favor of policy considerations aimed to promote grandparental involvement in the child-rearing process in the first few years of life.

In Chapter 2, we investigate the impact of family allowances on the likelihood of having another child, and the extensive and intensive margins of labor supply. Due to a measurement error in the key explanatory variable, we adopt an instrumental variable approach as a major estimation technique. More specifically, as instruments for the support reported by individuals, we use the eligibility amount of benefits, as well as indicator variables reflecting a change in the allowances after the introduction of the Federal Family Allowance Act (FamZG) which imposed a federal floor on child benefits, common to all 26 cantons in Switzerland. In addition to examining the effect of child allowances on fertility and labor market outcomes, we also study a second, closely related but distinct matter. Specifically, we identify the causal impact of the introduction of a universal floor on child benefits on the previously-mentioned outcomes.

The findings indicate that benefits play a large role in family decision-making. First, using an instrumental variable approach, we find that an increase in the family support improves the likelihood of having another child, but does not affect labor market outcomes. Second, a difference-in-differences analysis of the effect of the introduction of a minimum amount of child allowances all cantons are obliged to pay indicates that a floor on benefits led to a significant increase in the likelihood of having a child in affected cantons relative to unaffected ones while there was no significant difference between the differential effect of the policy on labor supply in affected and unaffected cantons. From a policy perspective, the results imply that providing financial support to families for raising children at a lower cost is likely to positively affect fertility without having an adverse effect on the labor market in countries where federal decision-makers aim to improve fertility rates.

Finally, Chapter 3 utilizes data from the European Social Survey to study the effect of the expansion of the mandatory paid maternity leave implemented in Switzerland in 2005, on individuals’ fertility intentions. Several earlier papers examined the effect on fertility outcomes or fertility intentions of changes in the duration of the paid parental leave of a relatively large magnitude of one year. The maternity benefit expansion implemented in Switzerland in 2005 was of a relatively small magnitude, from 8 unpaid weeks to 14 mandatory paid weeks, and thus its effect on fertility choices is less evident ex ante. Nevertheless, the findings from our estimations provide evidence of a differential change in fertility intentions between the two waves in the treatment group relative to the control group, suggestive of a positive effect of the implementation of the maternity benefit expansion on fertility intentions. We further evaluate three channels though which this positive effect may affect individuals’ child planning.

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