The effects of higher flat rate parental leave benefits

In the Swedish parental leave system parents are entitled to in total 480 days of benefits. Parents are compensated 390 days in relation to their previous incomes. But they are also entitled to 90 days with a relatively low flat rate benefit. Given the Swedish setting, rational and fully informed parents should take up all flat rate benefits. Still, it is well known that substantial amounts of flat rate benefits are left on the table. In this project, we study the effects of increasing the flat rate benefit level on the take-up of benefits of mothers and fathers at different income segments. We also examine the effects on other outcomes, as well as the spill-over effects on the up-take of other benefits.