Mom or preschool? How an extension to paid parental leave affects children’s future education and employment

27 August, 2021

In their most recent study, Alena Bičáková, Klára Kalíšková and Lucie Zapletalová quantify the impacts of the duration of paid parental leave on the education and future labor market outcomes of affected children when they reach 21-22 years of age. 

They examine the Czech Republic’s 1995 reform of paid parental leave, which extended the duration of parental allowance receipt from 3 to 4 years. This extension was not, however, accompanied by any extension of the job protection period that remained at 3 years. It also prevented the receiving parent to engage more substantially in the labour market, leading to one more year of full-time home child care.

The reform resulted in an additional 38 % of mothers with three-year-old children staying at home with their children. These mothers’ exclusive, full-time care mostly replaced the care their children would otherwise have received in state-subsidised preschools. Majority of the affected children thus started (pre)school education later, by at least one year.

The authors§ empirical findings show that this additional year of exclusive parental care at home, in place of attendance at preschool, had a negative impact on the children’s future educational and labor market outcomes. The children affected by this reform are 4 percentage points (p.p.) more likely to be neither studying nor working at the age of 21-22, and are 6 p.p. less likely to study at university. Those whose mothers do not have high-school leaving qualifications and who are living in the same household as their mother at the age of 21-22, are more than 9 p.p. more likely to be neither studying nor working, and are 12 p.p. less likely to go to university. Among girls, there is an increased likelihood that they will not be in paid employment at the age of 21-22 years, but will be taking care of the home instead.

The findings are in line with most international research documenting positive impacts of preschool attendance on children’s development: the social and intellectual stimuli that preschools provide are crucial for the long-term development of cognitive and non-cognitive skills, in particular for children from socio-economically disadvantaged families.

Full text of the study (in Czech)