In 1998 the Norwegian government introduced a program that increased parents’ incentives to stay home with children under the age of 3. Many eligible children had older siblings, and we investigate how this program affected the long-run educational outcomes of the older siblings. Using comprehensive administrative data, we estimate a difference-in-differences model that exploits differences in older siblings’ exposures to the program. We find a significant positive treatment effect on older siblings’ tenth-grade GPA, and this effect seems to be largely driven by mother’s reduced labor force participation and not by changes in family income or father’s labor force participation.
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Bettinger et al. (2014) studied this question.
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