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In France, having more than two children has a causal negative impact on mothers' labour supply. The question addressed in this paper is whether the paid parental leave alters this effect. To address this issue, we focus on a reform that modified the conditions in which labour decisions are taken. In July 1994, the Allocation parentale d'education was extended to parents of two children (among which one is less than three years old). We show that after the reform, that is, when families of two and more than two children have the same incentive to take a paid parental leave, having more than two children no longer has a negative effect on the participation probability of mothers. In addition, this is particularly true for mothers graduating from secondary school at most, who happen to be the main recipients of the benefit.

Reconciling Work and Family Life: The Effect of the French Paid Parental Leave