As female labor force participation continues to rise in the United States and throughout the
world, stay-at-home parents are becoming increasingly rare. Yet the notion that parental care is
not easily substituted remains central to the social norms and policies which either encourage or
discourage parents to stay home. We study a unique natural experiment which increased
Norwegian mothers’ likelihood of staying home with their children. A public program, called
Cash-for-Care, paid any parent a significant subsidy to stay at home with their children through
age three. We investigate how this program affected the long-run outcomes of the older siblings
of the eligible population. Using comprehensive data on children and their parents from
Norway, we estimate a difference-in-differences model which exploits differences in sibling’
exposures to the program. We find that graduation score of a student whose younger sibling was
eligible for the program, was about .02 grade points larger than comparable students who did not
have an eligible sibling. If this effect is driven solely by mother’s withdrawal from the labor
market, the estimated effect of a mother’s presence may be as much as one half of a standard
deviation.