The design of family policies strongly differs across countries.To identify the wellbeing effects of family policies, we investigate the impact of parental leave and child care reforms implemented in Germany in the mid-2000s using longitudinal panel data. Our results show that increased maternal benefits generate significant increases in mothers’ life satisfaction. Shorter parental leave encourages mothers to return to work more quickly after child birth. However, increased employment may come with long-term negative effects on mothers’ wellbeing. Using large temporal and spatial variation in child care coverage, we find that expansion in public child care has little effect on mothers’ life satisfaction. By contrast, there is a positive interaction between the two policies: localities whose increase in child care was above the median, experienced a higher increase in mothers’ life satisfaction after implemention of the parental leave reform.