Labor market - Study: Child Benefit Without Long-Term Consequences for Businesses
The introduction of Parental Money with longer absences, particularly by mothers, has had permanent positive effects on businesses. This was the finding of a study conducted by the Institute for Labor Market and Vocational Research (IAB) in Nuremberg in collaboration with the Federal Institute for Population Research (BIB) in Wiesbaden.
With the phasing out of Child Rearing Allowance by Parental Money, there was a short-term decrease in employment, especially in small and medium-sized businesses. However, there were no long-term negative effects on employment, wages, or the survival of businesses, according to the IAB researchers.
Up to €1,800 in Parental Money
Under the regulations of Child Rearing Allowance, mothers received approximately €450 per month for about twelve months. Since 2007, Child Rearing Allowance has been replaced by Parental Money. The amount is determined by the previous net income and the maximum amount is €1,800 per month.
While approximately 40% of mothers returned to work within twelve months of giving birth under the regulations of Child Rearing Allowance, it was only 20% in the case of Parental Money. However, this had no long-term negative consequences.
Parental leave with good prospects for long-term employment
It has been shown that newly hired parents have good chances of staying in the company for longer than twelve months. "Therefore, parental leaves in many cases can be a way to permanent employment," said Mathias Huebener, one of the authors of the study.
- The study in Nuremberg and Wiesbaden, conducted by the IAB and BIB, also highlighted that the shift from Child Rearing Allowance to Parental Money positively impacted mothers' opportunities in the labor market.
- The long-term sequence of employment and business survival in Germany has shown no negative effects following the replacement of Child Rearing Allowance with Parental Money, as indicated by the research conducted at the Federal Institute for Population Research in Wiesbaden.
- The implications of this shift in parental leave policy extend beyond small and medium-sized businesses, as the study conducted at the IAB in Nuremberg reveals.
- The phasing out of Child Rearing Allowance in favor of Parental Money has resulted in a lower percentage of mothers returning to work within twelve months, but this decrease has not led to any significant long-term challenges, according to the findings of the Federal Institute for Population Research in Wiesbaden.
