German family policy at the crossroads: analysing the impact of parental leave reform through simulation

Comparative studies of welfare reforms encounter two problems. First, the counterfactual problem is that in the real world schemes and their reforms do not coexist simultaneously and are hard to compare. Second, the contextual problem derives from the absence of comparable measures for change. Microsimulation helps to overcome these problems. It compares policy options – actual reforms or reform plans – simultaneously and provides a comparable measure: the disposable income of model families. This article uses a type–case approach to investigate recent reforms of the German parental leave benefit. Simulation makes those reforms comparable over time and across countries. Results show that the profile of the German scheme is changing from 'general family' towards 'dual-earner' support. Furthermore, the recent reforms make the German scheme converge towards the Swedish leave scheme. The recent reforms introduce a new concept of fairness and a focus on gender equality to German family policies.