Katrine Vellesen Løken

A Flying Start? Maternity Leave Benefits and Long-Run Outcomes of Children

We study a change in maternity leave entitlements in Norway. Mothers giving birth before July 1, 1977, were eligible for 12 weeks of unpaid leave, while those giving birth after that date were entitled to 4 months of paid leave and 12 months of unpaid leave. The increased time spent with the child led to a 2 percentage point decline in high school dropout rates and a 5 percent increase in wages at age 30. These effects were larger for the children of mothers who, in the absence of the reform, would have taken very low levels of unpaid leave.

Care Or Cash? The Effect Of Child Care Subsidies On Student Performance

Given the wide use of child care subsidies across countries, it is surprising how little we know about the effect of these subsidies on childrens longer-run outcomes. Using a sharp discontinuity in the price of child care in Norway, we are able to isolate the effects of child care subsidies on both parental and student outcomes. We find very small and statistically insignificant effects of child care subsidies on child care utilization and parental labor force participation. Despite this, we find significant positive effect of the subsidies on childrens academic performance in junior high school, suggesting that the positive shock to disposable income provided by the subsidies may be helping to improve childrens scholastic aptitude.

What is the Case for Paid Maternity Leave

We assess the case for generous government-funded maternity leave, focusing on a series of policy reforms in Norway that expanded paid leave from 18 to 35 weeks. We find the reforms do not crowd out unpaid leave and that mothers spend more time at home without a reduction in family income. The increased maternity leave has little effect on childrens schooling, parental earnings and labor force participation, completed fertility, marriage, or divorce. The expansions, whose net costs amounted to 0.25% of GDP, have negative redistribution properties and imply a considerable increases in taxes at a cost to economic efficiency.

Your Place or Mine? On the Residence Choice of Young Couples in Norway

Norwegian registry data are used to investigate the location decisions of a full population cohort of young adults as they complete their education, establish separate households, and form their own families. We find that the labor market opportunities and family ties of both partners affect these location choices. Surprisingly, married men live significantly closer to their own parents than do married women, even if they have children, and this difference cannot be explained by differences in observed characteristics. The principal source of excess female distance from parents in this population is the relatively low mobility of men without a college degree, particularly in rural areas. Despite evidence that intergenerational resource flows, such as childcare and eldercare, are particularly important between women and their parents, the family connections of husbands appear to dominate the location decisions of less-educated married couples.

Long-Term Consequences of Access to Well-Child Visits

A growing literature documents the positive long-term effects of policy-induced improvements in early-life health and nutrition. However, there is still scarce evidence on early-life health programs targeting a large share of the population and the role of such programs in increasing intergenerational mobility. This paper uses the rollout of mother and child health care centers in Norway, which commenced in the 1930s, to study the long-term consequences of increasing access to well-child visits. These well-child visits included a physical examination and the provision of information about adequate infant nutrition. Our results indicate that access to mother and child health care centers had a positive effect on education and earnings: access in the first year of life increased the completed years of schooling by 0.15 years and earnings by two percent. The effects were stronger for children from a low socioeconomic background. In addition, we find that individuals suffer from fewer health risks at age 40 and positive effects on adult height, which support the fact that better nutrition within the first year of life is the likely mechanism behind our findings. While there is increasing knowledge on the benefits of various types of early childhood programs, the costs are often neglected, making it hard to compare different programs. We add to this by showing that investments in mother and child health care centers pass a simple cost-benefit analysis.

Lifting the Burden: State Care of the Elderly and Labor Supply of Adult Children

We use a reform in the federal funding of care for the elderly in Norway to examine the effects of formal care expansion on the labor supply decisions of middle-aged children. We find a consistent and significant negative impact of formal care expansion on insured work absences for the adult daughters of single elderly parents. This effect is particularly strong for daughters with no siblings, who are also more likely to exceed earnings thresholds after the reform. We find no impacts of the reform on daughters’ mobility or parental health, and no effects on adult sons.

Incarceration, Recidivism and Employment

Understanding whether, and in what situations, time spent in prison is criminogenic or preventive has proven challenging due to data availability and correlated unobservables. This paper overcomes these challenges in the context of Norway’s criminal justice system, offering new insights into how incarceration affects subsequent crime and employment. We construct a panel dataset containing the criminal behavior and labor market outcomes of the entire population, and exploit the random assignment of criminal cases to judges who differ ystematically in their stringency in sentencing defendants to prison. Using judge stringency as an instrumental variable, we find that imprisonment discourages further criminal behavior, and that the reduction extends beyond incapacitation. Incarceration decreases the probability an individual will reoffend within 5 years by 29 percentage points, and reduces the number of offenses over this same period by 11 criminal charges. In comparison, OLS shows positive associations between incarceration and subsequent criminal behavior. This Sharp contrast suggests the high rates of recidivism among ex-convicts is due to selection, and not a consequence of the experience of being in prison. Exploring factors that may explain the preventive effect of incarceration, we find the decline in crime is driven by individuals who were not working prior to incarceration. Among these individuals, imprisonment increases participation in programs directed at improving employability and reducing recidivism, and ultimately, raises employment and earnings while discouraging further criminal behavior. For previously employed individuals, while there is no effect on recidivism, there is a lasting negative effect on employment. Contrary to the widely embraced ‘nothing works’ doctrine, these findings demonstrate that time spent in prison with a focus on rehabilitation can indeed be preventive for a large segment of the criminal population.

Nordic Economic Policy Review : Whither the Nordic Welfare Model?

The Nordic Economic Policy Review is published by the Nordic Council of Ministers. This year’s issue is part of the Danish presidency programme for the Nordic Council of Ministers in 2015. The revi ...