The Fatherhood Wage Premium in Russia

The position and behavior of adult individuals in the labor market is usually linked with the presence of children. Numerous studies show that mothers suffer a wage penalty relative to women without children. A less studied issue is whether men’s earnings are somehow affected by children. In this paper, we analyze the relationship between wages and having children among Russian men, using RLMS–HSE panel micro-data of 2010–2018. In this period, fathers earned, on average, 25% more than non-fathers, which suggests a high wage premium for fatherhood in the Russian labor market. Estimating wage equations with individual fixed effects we show, how ever, that this advantage vanishes after controlling for differences between fathers and non-fathers in socio-demographic and unobserved individual characteristics. This means that the observed gap is caused by (self-)selection of initially more productive men in fatherhood. Estimating models that take into account the age and number of children as well as their biological relationship with men still allows to identify a 2,5–3% wage premium for one biological child under the age of 3 years. We show that this premium is not related to a possible reverse influence of men’s wage growth on the decision to have a child and may be partly explained by the increased gender division of labor within the household after the appearance of a child. Additionally, we find that Russian men receive a marriage premium of about 3%.