Financial incentives, timing of births, and infant health: a closer look into the delivery room.

As a result of strong financial incentives created by the German parental leave reform on January 1, 2007, some 1000 births have been shifted from the last days of 2006 to the first days of 2007, especially by working mothers. This fact is already described in the literature, yet there is no evidence as to the mechanisms and only scarce evidence regarding the effects on newborn health. I use new data to study the timing of C-sections and the induction of births around the day the reform took effect. I estimate that postponed C-sections and inductions account for nearly 80 % of the pre-reform shortfall and nearly 90 % of the post-reform excess number of births. Despite concerns voiced by doctors before the reform, hardly any evidence can be found for detrimental health effects of those shifts, as measured by changes in gestational age, birth weight, APGAR scores, neonatal mortality, or hospitalization.