View article

Since January 1999, all parents in Norway with children aged 1 to 3 years who do not attend publicly subsidized day care are eligible for “cash‐for‐care” (CFC). One important purpose of the reform is to enable parents to spend more time with their children. We analyze whether the CFC reform has affected marital stability, using individual register data covering information on 130,265 observations of married couples. The results from both a natural experiment approach and from a matching procedure indicate that the CFC reform has reduced the likelihood of marital dissolution in the short run.