Federica Meluzzi (LMU Munich)
Pia Molitor and Jakob Wegmann
Low take-up of parental leave by fathers is a key driver of the unequal career costs of parenthood for men and women. Can the design of public policies effectively increase fathers participation in parental leave? This paper provides the first causal evidence on how parental leave benefit generosity shapes the intra-household allocation of childcare. We exploit exogenous variation in parental leave benefits induced by a sharp kink in the benefit schedule relative to individual pre-birth net income, combined with novel German administrative data covering millions of households between 2014 and 2018. Using a double Regression Kink Designan extension of the RKD methodology by \citet{card}we estimate the behavioral responses of both mothers and fathers to changes in their own and their partners replacement rates. We find that a reduction in the mother's benefit leads to a substitution in parental inputs, decreasing her leave duration while increasing the father's take-up, especially along the intensive margin, without altering the total duration of parental leave taken by the household. Responses are stronger when fathers face lower opportunity costs and in more egalitarian regions. Our findings highlight how financial incentives interact with cultural and economic constraints to shape household decisions, with implications for the design of family policies aimed at fostering gender equality.