Abstract
The birth of a child has a huge impact on the economic situation of a family and welfare states across Europe differ in the way they support the family in case of this event. This paper applies microsimulation to illustrate the impact of different family situations on the economic situation of families in 6 European countries. It compares the situation of families at different income levels and in distinctly different situations: First, the paper looks at the economic situation of the family after the birth of a child with one parent on paid leave. Second, the paper illustrates the impact of day care costs on the economic situation of the family after the expiration of the leave scheme and the return of both spouses to work. Furthermore, to analyse and compare the transitions from one family situation to the next, the paper also presents time graphs showing the changing economic situation for the respective families over a time period 2 years after the child's birth.