The Swedish parental benefit and its effects on childbearing : - An empirical study of whether raised compensation levels within the parental benefit cause increased probabilities of having children

Abstract: In this study I analyze the Swedish parental benefit system focusing on a certain component, the basic level, and its effects on childbearing. The basic level consists of a fixed monetary amount given to parents. The compensation level was raised three times between 2002 and 2004, which would, according to economic theories, imply increased incentives for having children. I use longitudinal data of women in fertile age between 1993 and 2005. Applying a difference-in-differences model on comparison groups based on region of birth I conclude that the policy changes probably did not cause increased probabilities of having children.