A generous parental leave reform was introduced in Estonia in 2004. This did indeed increase the likelihood of a second or third child being born into the family and also shortened the interval between births, according to Sanan Abdullayev’s doctoral thesis, defended at Tallinn University. At the same time, taking shared parental leave did not necessarily mean that the father took time off work and assumed primary responsibility for the children while receiving the benefit.
In 2004, parental benefits began to be calculated on the basis of the parent’s previous income
Prior to the 2004 parental leave reform, a child’s carer could take a long period of parental leave, but childcare allowances were paid at the same low rates to everyone. The reform shortened the period over which the benefit is paid, but linked the amount of the benefit to the parent’s previous income. Thus, the benefit generally began to compensate for the previous earnings of the parent staying at home with the child. Parents who had their next child within 30 months of the birth of their previous child were able to retain the rate of benefit they had been receiving prior to the birth of their previous child.
The benefit led to more second and third children
Sanan Abdullayev, a recent PhD graduate from the School of Governance, Law and Society, used data from Estonian national registers to investigate how the 2004 reform affected families. Abdullayev’s doctoral thesis is the first study to use composite models to analyse the impact of family policy measures.
As a result, it is now possible for the first time to distinguish whether family policy primarily influenced the likelihood of having a subsequent child or the interval between births.
Based on an analysis of data on the entire permanent population of childbearing age in Estonia, the study found that the reform increased the likelihood of having a second and third child and also shortened the interval between births. The impact was strongest amongst mothers with a higher education qualification, for whom the benefit compensated the majority of their previous income. At the same time, the likelihood of having another child also increased amongst mothers with lower levels of education and income. As a result of the reform, parents who had previously been unemployed began to receive benefits close to the minimum wage. Consequently, the reform provided some parents with additional household income.
The decision as to which parent applies for the benefit reflects financial considerations
The doctoral thesis also examined the use of shared parental leave. Parents’ income was the most important factor in predicting which parent would make use of the benefit. The more a father earned compared to the child’s mother, the more likely he was to claim the parental benefit. However, this did not necessarily mean that the father stayed home instead of going to work. Around 70 per cent of fathers who received the parental benefit were working at least part-time during their leave in order to boost their family’s total income. This is possible because Estonia’s family policy allows parents to receive parental benefits while continuing to work. Consequently, in the Estonian context, a father receiving the parental benefit cannot be interpreted as him taking primary responsibility for childcare, but rather as a financial decision aimed at improving the family’s financial situation.
A father staying at home increased the likelihood of having a third child
One of the most interesting findings of the doctoral thesis was that a father’s use of paternity leave was associated with a higher probability of a third child being born into the family, and within a shorter timeframe. The link was particularly clear in families where the mother returned to paid work while the father received paternity benefits.
The reform achieved its objective
The doctoral thesis shows that the Estonian parental benefit has fulfilled one of its main objectives: generous income-related allowance paid over a sufficiently long period may increase the likelihood of having another child. At the same time, the study shows that, when assessing the impact of family policy, one should look not only at which parent receives the benefit, but also at how the burden of childcare is actually shared between the parents.
Observational study
People
9-Jul-2026