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Family policy and maternal employment in the Czech transition: a natural experiment

Abstract

Czech family policies have gone through dramatic changes since the 1989 transition to a market economy, resulting into the highest employment gap between women with and without pre-school children in OECD. This paper focuses on the 1995 Czech Parental Benefit reform which extended the payment of universal parental benefits to 4 years instead of 3 without an equivalent extension of job-protected parental leave, leaving to mothers the choice of either guaranteed return to employment or an additional 12 months of benefits. The study relies on a difference-in-differences strategy to assess the net effect of this large-scale reform on mothers’ labour market participation. I find a strong negative impact on mothers’ probability of return to work at the end of parental leave, with a heterogeneous size with respect to their educational attainment. I also find evidence of the persistence of this detrimental effect on mothers’ employment beyond the short-term horizon targeted by the legislators.

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Notes

  1. This study circulated between 2014 and 2016 under the title “Female Labour Supply in the Czech Transition: Effects of the Work-Life Conciliation Policies”, released as EconomiX Working Paper 2014-50.

  2. The fertility in the 1960s also reflects the wide availability and affordability of birth control.

  3. See Fig. 5 in Appendix.

  4. Without counting pre-birth absence from employment, covered by the insurance-based maternity leave. Mothers who are ineligible for maternity leave fall directly under the universal parental leave and benefit status.

  5. 7907Kc, average monthly gross wage of employees in the civil sector of the national economy in 1995, provided by the Czech Statistical Office

  6. The most common reasons for not returning to previous employment being the lack of suitable childcare, disagreements over return conditions such as unavailability of part-time contracts (Kucharova and Svobodova 2006), firm restructuring and redundancy dismissals, with a certain social acceptance of these practices by the returnee mothers (Hašková 2015). Related laws and practices somewhat improved in the recent decades under pressure from the EU (Haskova and Uhde 2011).

  7. As Saxonberg (2013) suggested, “familialist” policy should rather be referred to as “maternalist”, since the stress is put on the mothers’ role as caregivers.

  8. In addition to the transition to the age of 3, I identify in the same way mothers whose youngest child recently turned 4, 5 and 6, for complementary analysis and robustness checks.

  9. See Table 8 (B and C) with summary statistics of the sample, in the Appendix.

  10. The positive sign might be misleading, but the interpretation of the coefficient is the probability of employment in the reform cohort (1995–1996), taking the non-reform cohort as reference (1997–1998). The employment rates were higher in the first period, and for this reason the coefficient is positive.

  11. The summary statistics for this cohort are reported along with the other cohorts in Table 8 (A) in the Appendix.

  12. See the work and numerous public appearances of the influential Czech psychologist Zdenek Matejcek, dedicated to establishing the negative effect of institutional childcare on a child’s development and well-being, as well as to promoting the role of family as caregiver.

  13. Incorporating spouses’ education into the analysis does not appear to bring additional understanding to mothers’ return-to-work patterns, either as covariate or as subsampling dimension. Results are available upon request.

  14. See Tables 10 and 11 in the Appendix for estimated effects on activity levels with the first and second D-in-D approach.

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Acknowledgments

I am very grateful to Dominique Meurs, Uta Schönberg, Florent Fremigacci, Erich Battistin and the anonymous referees of this Journal for their valuable help and comments. I also thank Christian Dustmann and Claudio Lucifora for their indispensable support, and all the participants of the 18th European IZA Summer School, the DEFAP/LASER Summer School in Applied Microeconometrics and the Fourth SOLE/EALE World Meetings for their helpful suggestions.

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Correspondence to Alzbeta Mullerova.

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Appendix

Appendix

Fig. 5
figure 5

Employment gap—women with children under 6 years old. Note: The maternal employment gap is defined as the difference in employment rates between women with and without children of pre-school age. Source: EU Labour Force Survey, in European Commission Indicators for monitoring the Employment Guidelines (2010)

Table 8 Summary statistics of the sample
Table 9 Impact of the 1995 reform on post-PL employment and activity
Table 10 Impact of the 1995 reform on post-PL activity difference-in-differences, first approach
Table 11 Impact of the 1995 reform on post-PL activity

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Mullerova, A. Family policy and maternal employment in the Czech transition: a natural experiment. J Popul Econ 30, 1185–1210 (2017). https://doi.org/10.1007/s00148-017-0649-9

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Keywords

  • Parental leave
  • Policy evaluation
  • Female employment

JEL classifications

  • J16
  • J18
  • P30