Spillover Effects of Old-Age Pension Across Generations : Family Labor Supply and Child Outcomes

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Kaufmann, Katja ; Özdemir, Yasemin ; Ye, Han:
Spillover Effects of Old-Age Pension Across Generations : Family Labor Supply and Child Outcomes.
Bonn , 2022 . - (IZA Discussion Paper ; 15388 )
DOI: https://doi.org/10.2139/ssrn.4148133

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Abstract

We study the impact of grandparental retirement decisions on family members' labor supply and child outcomes by exploiting a Dutch pension reform in a fuzzy Regression Discontinuity design. A one-hour increase in grandmothers' hours worked causes adult daughters with young children to work half an hour less. Daughters without children, with older children and sons/daughters-in-law are not affected. We show important long-run impacts on maternal labor supply and on the child penalty. Test score effects are positive for children aged 4-7 (substitution from grandparental to maternal care), and negative for children aged 11-12 (substitution from grandparental to formal childcare).