Public Policy as the Fuel of Fertility: Effects of a Policy Reform on the Pace of Childbearing in Sweden in the 1980s

Abstract

In 1980, Sweden made a 'speed premium' on childbearing statutory by letting parents retain the parental leave benefits paid after the birth of one child until after the next birth if it arnved within two years; in 1986 this eligibility interval was extended to thirty months. For longer birth intervals, benefit rights must be re-established by earning a work-related income. During a period of a general rise in fertility in Sweden, parents reacted by increasing their fertility particularly strongly before the end of the eligibility interval. This paper displays these developments It is a rare demonstration of a direct causal effect of a policy reform on demographic behavior. The general development of fertility levels at the various birth orders has some independent interest and is presented as a background.