Giorgia Conte (Trinity College Dublin)
This paper examines the distributional effects of introducing paid leave policies in the US on fertility and children’s human capital. Using a life cycle model calibrated to US data, I simulate the introduction of a paid parental leave policy, and find that it raises fertility by 9%, primarily among low-income families. The policy generates a quantity-quality trade-off: while paid leave increases parental time investment in newborns, fostering early development, it reduces investments in later childhood for families with stronger fertility responses who face financial constraints, leading to losses in human capital. These findings highlight the potential for paid leave to boost fertility but also reinforcing income-related disparities in child outcomes.