This paper analyzes the effects of changes in the duration of paid, job-protected parental leave on mothers' higher-order fertility and postbirth labor market careers. Identification is based on a major Austrian reform increasing the duration of parental leave from one year to two years for any child born on or after July 1, 1990. We find that mothers who give birth to their first child immediately after the reform have more second children than prereform mothers, and that extended parental leave significantly reduces return to work. Employment and earnings also decrease in the short run, but not in the long run. Fertility and work responses vary across the population in ways suggesting that both cash transfers and job protection are relevant. Increasing parental leave for a future child increases fertility strongly but leaves short-run postbirth careers relatively unaffected. Partially reversing the 1990 extension, a second 1996 reform improves employment and earnings while compressing the time between births.

The aim of this paper is to study whether a child's schooling choices are affected by the schooling choices of other children. Identification is based on a randomized targeted intervention that grants a cash subsidy conditional on school attendance to a subgroup of eligible children within small rural villages in Mexico (PROGRESA). This policy change spills over to ineligible children if social interactions are relevant. Results indicate that the eligible children tend to attend school more frequently, and the ineligible children acquire more schooling when the subsidy is introduced in their local village. Moreover, the overall effect of PROGRESA on eligible children is the sum of a direct effect due to cash transfers and an indirect effect due to changes in peer group schooling. Interestingly, the social interactions effect is almost as important as the direct effect.