How policy matters: Germany’s parental leave benefit reform and fathers’ behavior 1999-2009

In 2007, Germany enacted a radical new parental leave benefit scheme that grants parents 67 percent of their previous income, and includes two “daddy months.” In this paper, we use data from the German Microcensus for the period 1999 to 2009 to explore how this reform has changed fathers’ use of parental leave. We find strong overall increase in parental leave usage among men. Two groups of men in particular changed their behavior: highly educated men and fathers who are on fixed-term employment contracts.