Over the past five decades, women's educational attainment and labor market participation have increased tremendously. At the same time, many developed countries have faced decreasing birth rates and below replacement fertility levels. All OECD countries, except the US, now provide paid parental leave in order to facilitate family and career compatibility and lower the cost of childbearing. Drawing on insights from a major reform of parental leave benefits in Germany, this seminar explores whether earnings dependent parental leave benefits have a positive impact on fertility, and whether they are successful at narrowing the baby gap between high educated (high earning) and low educated (low earning) women. Anna Raute, WAPPP Fellow; Assistant Professor in Economics, University of Mannheim