Since 2004 all parents in Estonia are eligible for parental benefit in order to help the successful reconciliation of work and family life. Being the most expensive family policy measure, its implementation, utilisation and impact need to be examined.
Following the 2006 study, this study shows that there have been changes to recipient and fertility and labour force behaviour. However, the possible impact of major changes in society and economic environment.
During the observation period the duration, number of recipients as well as the amount of the benefit increased. Significantly more parents receive the benefit in the same amount as their average salary the previous year. The benefit is most lucrative for single and young parents, but also women with fourth or fifth child. In that case, many of them were not employed before, which means the benefit size is often the minimum margin or minimum wage. Maximum margin applies mostly to parents over 30.
The study concludes that parental benefit has had a significant impact on fertility behaviour of women. After the imposition of parental benefit, especially women with higher education and higher income are more likely to give birth. Moreover, women with higher salary tend to give birth to a second and third child more often and people have started to plan consecutive births. However, the changes among lower income groups are not so evident. This means that the increase in fertility rate occurs mainly by virtue of more active behaviour of highly educated women.
Parental benefit has had an impact on women’s labour market behaviour. The study clearly shows that women return to work later. On the other hand, after the end of subsidies women return to labour market as fast as before the imposition of parental benefit. Several indicators also show that parental benefits increase the motivation to work before childbirth.