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VLIV ZVÝŠENÍ RODIČOVSKÉHO PŘÍSPĚVKU NA PARTICIPACI ŽEN NA TRHU PRÁCE IDEA 2022 Study 14/2022 What Effects did the Parental Allowance Increase Have on Women’s Participation in the Labour Market2 NOVEMBER 2022 JAKUB GROSSMANN, FILIP PERTOLD, MICHAL ŠOLTÉS, MATĚJ ŠARBOCH, LUCIE ZAPLETALOVÁ Summary • We evaluate the effects of the 2020 increase in the total value of the parental allowance by 80 thousand CZK (36%) on labour market participation among mothers of young children. Mothers’ employment decisions have reflected the raise in income that resulted from the higher allowance, and many mothers responded to the increase by claiming the parental allowance over a longer period of time. Among mothers of three-year-olds, the labour market participation rate reduced from 70% to 60%, i.e. by a whole 10 percentage points (p.p.) Among mothers of two-year-olds, the labour market participation rate fell 6 p.p. to 20%. In both groups, the number of hours worked per week also decreased correspondingly. • The reform’s effects also varied with the number of children. The reduction in employment rate was more pronounced (10 p.p.) among mothers receiving the parental allowance for their first child. It is likely that these mothers were planning to have another child and that they used the additional allowance to bridge the remaining time until the birth of their second child, i.e. avoiding a return to work in between children. 2 This study presents the authors’ own views and not the official position of the Economics Institute of the Czech Academy of Sciences nor the Charles University Center for Economic Research and Graduate Education (CERGE). We are grateful to Daniel Münich, Klára Kalíšková and Nikolas Mittag for their very valuable comments and suggestions for improving the study, and to many other colleagues for their useful feedback on the working versions of our calculations and text. Any remaining errors are the authors’ own. This study was produced with support from the Czech Academy of Sciences within its AV21 Strategy program Society in Motion. This study summarises the main findings and conclusions of the research paper by Grossmann, J., Pertold, F., Šoltés, M. and Šarboch, M., “Parental Allowance Increase and Maternal Labour Supply: Evidence from Czech Reform” (2022). This result was financially supported via institutional support for the long-term conceptual development of the research organization for 2018–2022, and is part of research task 09-S4-2021-VÚBP, “Determinants and impacts of the choice of the length of parental leave in the Czech Republic,” addressed by the Occupational Safety Research Institute in cooperation with CERGE-EI, 2021–2023. 3