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Stay-at-Home Mom Knows Best?

Just how important is Mom during a child’s first year of life?  A new working paper by the economists Pedro CarneiroKatrine V. Løken, and Kjell G. Salvanes exploits a recent reform in Norway to answer that question.  The reform, which increased paid and unpaid maternity leave, “increased maternal leave on average by 4 months,” but had no effect on family income.  The authors found that more time with Mom led to lower high school dropout rates later on.
Specifically, “increased time with the child led to a 2.7 percentage points decline in high school dropout. For mothers with low education we find a 5.2 percentage points decline. The effect is especially large for children of mothers who prior to the reform, would take very low levels of unpaid leave.”