Child Home Care Allowance: Transition to Second- and Third-Order Births in Finland

Abstract: In this study, I study the relationship between the use of the child home care allowance and second and third births among women aged 19-44 in Finland. I use register data from the Finnish Census Panel (FCP) on 254 465 women who had a second or third child during 1993 to 2007. I apply discrete-time event-history analysis to examine whether women using the child home care allowance while their previous child was under the age of three have a higher risk to proceed to subsequent childbearing – second and third births – than those not using the allowance while their previous child was under the age of three. The analysis is conducted separately for second and third births. The results show that the use of the child home care allowance has an effect on the risk of subsequent child, and that women using the child home care allowance have a higher risk of having a second and a third child than women not using the allowance. Also, the risk of having a second child is found to be higher than having a third child. According to the findings, timing matters. There are differences in how soon women get their subsequent child, and not only whether they get a second and third child or not. These differences are not explained by the control variables. However, the analysis does not demonstrate any causality between the use of the allowance and subsequent childbearing. The impact of the use of the allowance on childbearing may be due to selection effects.