Childcare Cash Benefits and Fertility Timing in Norway

Trude Lappegård, Statistics Norway
Arnstein Aassve, University of Essex

In 1998 a new cash-benefit for parents of small children was introduced in Norway. Its purpose was to provide a cash payment to parents who preferred to care for their children at home or to compensate those who were not offered external childcare provision. The policy was considered gender biased, creating reduced incentives for women to participate in the labour market and therefore encouraging a more traditional division of labour in the family. Given this background of the policy, we ask first “who takes the cash benefit?” Second, by applying simple matching techniques, we ask “Do couples taking the benefit behave differently in terms of their fertility timing?” Using information from Norwegian registers we find that more traditional households (in a broad sense) are more likely to take the cash benefit. Those taking the benefit accelerate childbearing significantly, though the reasons why they do so varies by socio-economic groups.