Causal effects of paternity on children and parents

This paper is part of the research activities at the center of Equality, Social Organization, and Performance (ESOP) at the Department of Economics at the University of Oslo, in collaboration with the Ragnar Frisch Centre for Economic Research. ESOP is supported by the Research Council of Norway. Data made available by Statistics Norway have been essential for the research project.Abstract: In this paper we use a parental leave reform directed towards fathers to identify the causal effects of paternity leave on children's and parents' outcomes. We document that paternity leave causes fathers to become more important for children's cognitive skills. School performance at age 16 increases for children whose father is relatively higher educated than the mother. We find no evidence that fathers' earnings and work hours are affected by paternity leave. Contrary to expectation, mothers' labor market outcomes are adversely affected by paternity leave. Our findings do therefore not suggest that paternity leave shifts the gender balance at home in a way that increases mothers' time and/or effort spent at market work. Keywords: parental leave, labor supply, child development