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Trapped at home: The effect of mothers' temporary labor market exits on their subsequent work career

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  • Drange, Nina
  • Rege, Mari
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    Abstract

    This paper investigates how mothers' decision to stay at home with young children affects their subsequent work careers. Identification is based on the introduction of the Cash-for-Care program in Norway in 1998, which increased mothers' incentives to withdraw from the labor market when their child was one and two years old. Our estimates demonstrate that, for mothers without a university degree or with pre-reform earnings below the median, the program had effects on earnings and full-time employment even when the child was no longer eligible for Cash-for-Care at ages four and five. However, from age six, we can no longer see any effects. Further analysis suggests that the effects dissipate because most mothers remained attached to the labor force through part-time employment.

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    Bibliographic Info

    Article provided by Elsevier in its journal Labour Economics.

    Volume (Year): 24 (2013)
    Issue (Month): C ()
    Pages: 125-136

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    Handle: RePEc:eee:labeco:v:24:y:2013:i:c:p:125-136

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    Web page: http://www.elsevier.com/locate/labeco

    Related research

    Keywords: Female labor supply; Family; Home production; Parental leave;

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    References

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    1. Pål Schøne, 2004. "Labour supply effects of a cash-for-care subsidy," Journal of Population Economics, Springer, Springer, vol. 17(4), pages 703-727, December.
    2. Ghazala Naz, 2004. "The impact of cash-benefit reform on parents’ labour force participation," Journal of Population Economics, Springer, Springer, vol. 17(2), pages 369-383, 06.
    3. Jacob Mincer & Haim Ofek, 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 3-24.
    4. Antoni Calvó-Armengol & Matthew O. Jackson, 2004. "The Effects of Social Networks on Employment and Inequality," American Economic Review, American Economic Association, American Economic Association, vol. 94(3), pages 426-454, June.
    5. Mari Rege & Ingeborg Solli, 2013. "The Impact of Paternity Leave on Fathers’ Future Earnings," Demography, Springer, Springer, vol. 50(6), pages 2255-2277, December.
    6. Marit Rønsen, 2009. "Long-term Effects of Cash for Childcare on Mothers' Labour Supply," LABOUR, CEIS, CEIS, vol. 23(3), pages 507-533, 09.
    7. Mogstad, Magne & Pronzato, Chiara D., 2009. "Are Lone Mothers Responsive to Policy Changes? Evidence from a Workfare Reform in a Generous Welfare State," IZA Discussion Papers 4489, Institute for the Study of Labor (IZA).
    8. Michael Baker & Kevin Milligan, 2008. "How Does Job-Protected Maternity Leave Affect Mothers' Employment?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 26(4), pages 655-691, October.
    9. Jacob Mincer & Solomon Polacheck, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 397-431 National Bureau of Economic Research, Inc.
    10. Eric Bettinger & Torbjørn Haegeland & Mari Rege, 2013. "Home with Mom: The Effects of Stay-at-Home Parents on Children's Long-Run Educational Outcomes," CESifo Working Paper Series 4274, CESifo Group Munich.
    11. Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 76-110 National Bureau of Economic Research, Inc.
    12. Lawrence M. Berger & Jane Waldfogel, 2004. "Maternity leave and the employment of new mothers in the United States," Journal of Population Economics, Springer, Springer, vol. 17(2), pages 331-349, 06.
    13. Jonah B. Gelbach, 2002. "Public Schooling for Young Children and Maternal Labor Supply," American Economic Review, American Economic Association, American Economic Association, vol. 92(1), pages 307-322, March.
    14. Christopher J. Ruhm, 1998. "The Economic Consequences Of Parental Leave Mandates: Lessons From Europe," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(1), pages 285-317, February.
    15. Rafael Lalive & Josef Zweimüller, 2009. "How does Parental Leave Affect Fertility and Return to Work? Evidence from Two Natural Experiments," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 124(3), pages 1363-1402, August.
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    Cited by:
    1. Reiso, Katrine Holm, 2014. "The Effect of Welfare Reforms on Benefit Substitution," Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics 22/2014, Department of Economics, Norwegian School of Economics.

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