Following a Swedish progressive reform, how the Swedish fathers took more parental leave, but how the result was not as good as planned… A study realised for the Institute for the Study of Labor (IZA) in Bonn by John Ekberg, SOFI, Stockholm University, Rickard Eriksson, SOFI, Stockholm University and Guido Friebel,
University of Toulouse (EHESS and IDEI) in May 2005
Abstract
Many countries are trying to incentivize fathers to increase their share in parental leave and in household work to improve female labor market opportunities. Our unique data set stems from a natural experiment in Sweden. The data comprises all children born before (control group) and after the reform (treatment group) in cohorts of up to 27,000 newborns, mothers and fathers. We find strong short term effects of incentives on male parental leave. However, we find no learning-by doing, or specialization, effects: fathers in the treatment group do not have larger shares in the leave taken for care of sick children, which is our measure for household work.
Discussion and implications
The main motivation for the “daddy-month reform” was to increase the opportunities
of women in the labor market and induce more equal labor market
outcomes. Based on Becker’s work (1965, 1981, 1985), there was a belief in
society that more parental leave by fathers could help decrease the special-
ization of mothers in human capital for household work and child care. This
would, in turn, increase the household and child care human capital of fathers.
The reform succeeded in inducing many fathers to take more parental
leave, but it did not affect the intra-household allocation of care for sick
children.
To draw conclusions from this experiment, one must ask why there were
no effects on care for sick children at all. Clearly, the reform design had
its weaknesses. In particular, fathers could allocate their parental leave over
eight years. It should be expected that an effect on human capital and longterm
behavior would be more likely, if parental leave had to be taken in a
shorter period of time and when the child is very young. Probably more
important is the fact that the reform may not have provided a strong enough
stimulus – an average increase in fathers’ parental leave by less than a month
may not be sufficient to affect human capital acquisition.
Hence, it is an open question whether reforms providing stronger incentives
to fathers to take parental leave could induce long-term behavioral
changes. In any case, our study shows how well incentives work in the shortterm,
but also how difficult it is to induce behavioral changes and household
decision-making. Note that we even find very little long-run effects in the
subgroups for which the effects of the reform should be most pronounced (see
4.3).
It is important to note that there are other economic forces than human
capital acquisition that may be responsible for unequal labor market outcomes.
For instance, given gender roles and norms in society, employers may
interpret parental leave by fathers as a bad signal about their job commitment.
Two papers have indeed found that fathers suffer greater wage losses
when taking parental leave than mothers (Stafford and Sundström, 1996,
Albrecht et al, 1999). This is in line with parental leave being interpreted
as a signal of lacking job commitment. The daddy month has induced many
fathers to use at least one month and hence, there should be less of a stigma
associated with taking parental leave. However, the reform did not affect
the care for sick children benefit. A theory built on signalling could thus to
some extent explain the asymmetric effects concerning the two benefit systems.
There are other important factors, for instance, “identity” (Akerlof
and Kranton, 2000), which may explain different preferences behavior across
gender.
What type of reform could teach us more about the degree to which
social policies can influence household decisions concerning child care? First
of all, it appears useful to carefully identify the theoretical basis for any of
these reforms and generate empirical predictions. Second, one may have to
experiment with more intensive reforms. Reserving half of the parental leave
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for men would indeed be such a test. However, against the background of
our study, it should be clear that there are trade-offs associated with such
a drastic reform. While the daddy month induced more parental leave by
fathers, it should not be forgotten that it reduced total parental leave per
child by five days. Consequently, a more intensive reform may have such
effects on a larger scale.
In this respect, it is also important to note that at least in Sweden, the
gender wage gap is very low for lower skill groups and is most significant for
higher skill groups (Albrecht et al, 2003). Hence, a more drastic reform has
uncertain effects in terms of labor market opportunities, but may result in
welfare losses for some groups. To reduce these potential welfare losses, we
hence believe that if there were such an experiment, it should not be designed
for the entire economy, but rather for subgroups, for example segmented
regionally. However, introducing such a reformfor only part of the population
may be difficult to implement.
Concluding remarks
We have investigated the effects of the daddy-month reform, introduced in
Sweden in 1995. Different treatment of parents whose children were born
before and after the reform provides a natural experiment. The share of
fathers taking zero days of parental leave in the treatment group decreased
from 54 to 18 percent, and the number of fathers using around one month
of parental leave increased from 9 to 47 percent. The number of days of
parental leave by fathers increased by about 15 and decreased by about 20
for mothers.
The reform reached its short-term goal of increasing fathers’ parental
leave remarkably well, but we have not found any signs that more parental
leave has changed the behavior of fathers in terms of taking care for sick
children.
Hence, it appears rather easy for a government to incentivize fathers to
take parental leave. However, it appears much harder to induce behavioral
changes, through the acquisition of human capital for household work and
child care.
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