Modeling Family Leave Policies
Carnicelli, Lauro; Kanninen, Ohto; Karhunen, Hannu; Kosonen, Tuomas; Ravaska, Terhi (2020-04-15)
Julkaisusarja:Publications of the Government´s analysis, assessment and research activities 2020:20
Julkaisun pysyvä osoite on
This publication is part of the implementation of the Government Plan for Analysis, Assessment and Research. (tietokayttoon.fi) The content is the responsibility of the producers of the information and does not necessarily represent the view of the Government.
This study presents a model that helps to solve the predicament facing policymakers by improving on the existing tools to calculate the effects of changes in the current policies. We present a model that allows its user to analyze the dynamic behavioral effects of changes in the family leave policies. We also show a number of policy-experiments that demonstrate the effects of changing parental leave policies using our model. In the policy-experiments we vary the length and level of different family leave policies to illustrate how the usage of parental leaves respond in the model to these kinds of changes. When the model is used in actual policy making, one can more easily conduct these kinds of policy-experiments as well as study the sensitivity of the results to the elasticity parameters and other parameters in the model. This report also presents an extensive literature review on the causal effects of family leave policies on the usage of policies. The baseline elasticity parameters of the model are based on this prior literature. The main conclusion drawn from this literature review is that parents are fairly sensitive to increases in benefits related to home care, such as paid parental leave or subsidies to home care, i.e., the participation elasticity in this case is relatively high. However, the responses are more mixed when day care fees are lowered.