ifo Dresden: Longer Paid Parental Leave Makes Children Happier Later in Life

In the study, Heisig and Zierow analyzed East German reforms in 1976 and 1986 introducing the concept of a “baby year” that previous research on parental leave research has not considered. These reforms extended paid parental leave from 5 to 12 months. Beginning in 1976, mothers with more than one child were allowed to take the paid baby year. As of 1986, mothers were eligible to do so with their first-born child. “These two points in time and different eligibility criteria enable us to estimate the effects of extended parental leave,” the authors say.

They go on to highlight the special features of the German Democratic Republic, with its very high level of female employment, especially mothers, and its well-developed network of day nurseries. This makes the alternative scenario to parental leave clear: “We compare the life satisfaction of children who spent their first 12 months of life with their mothers to the life satisfaction of children who entered day care after 5 months, allowing their mother to return to work,” the authors say.