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New Estimates of Mothers’ Forgone Earnings Using HILDA Data

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Author Info

  • Trevor Breusch

    ()
    (Australian National University)

  • Edith Gray

    (Australian National University)

Abstract

Women who have children miss out on potential earnings. This happens through a combination of time out of the labour force, reduced working hours and lower paying jobs. We examine mothers' forgone earnings using HILDA 2001 data and find substantial effects, which vary with the woman's education and number of children. At a middle level of education (completed year 12 only), women forgo around 31 per cent of lifetime potential income for a first child, an additional 13 per cent for a second child, and a further 9 per cent for a third child. More highly educated women lose less proportionally than the less educated, although their dollar amounts of forgone earnings are higher. There is evidence, in comparison with previous studies, that the proportions forgone are falling with time, but more clearly so for women with higher education. We also find that women who delay motherhood maintain slightly more earnings than early childbearers.

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Bibliographic Info

Article provided by Bankwest Curtin Economics Centre (BCEC), Curtin Business School in its journal Australian Journal of Labour Economics.

Volume (Year): 7 (2004)
Issue (Month): 2 (June)
Pages: 125-150

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Handle: RePEc:ozl:journl:v:7:y:2004:i:2:p:125-150

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Web page: http://business.curtin.edu.au/research/publications/journals/ajle/
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Related research

Keywords: Marriage; Marital Dissolution; Family Structure Time Allocation and Labour supply Value of Life; Foregone Income;

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Cited by:
  1. Xiaodong Gong & Robert Breuing, 2011. "Estimating Net Child Care Price Elasticities of Partnered Women With Pre-School Children Using a Discrete Structural Labour Supply-Child Care Model," CEPR Discussion Papers 653, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  2. Xiaodong Gong & Robert Breunig, 2012. "Estimating net chid care price elasticities of partnered women with pre-school children using a discrete structural labour supply-child care model," Treasury Working Papers 2012-01, Treasury, Australian Government, revised Nov 2012.
  3. Nick Parr, 2010. "Childlessness Among Men in Australia," Population Research and Policy Review, Springer, vol. 29(3), pages 319-338, June.
  4. Alfred Michael Dockery & Sherry Bawa, 2013. "The Impact of Children on Australian Couples' Wealth Accumulation," Bankwest Curtin Economics Centre Working Paper series WP1302, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
  5. Peng Yu, 2006. "Higher Education, the Bane of Fertility? An investigation with the HILDA Survey," CEPR Discussion Papers 512, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  6. Robert Fenge & Jakob von Weizsäcker, 2006. ""Generation Enkellos" und Rentenbeitragsrabatt für Eltern," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 59(05), pages 11-18, 03.
  7. Nick Parr, 2011. "The contribution of increases in family benefits to Australia’s early 21st-century fertility increase: An empirical analysis," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 25(6), pages 215-244, July.
  8. Nick Parr, 2010. "Satisfaction with life as an antecedent of fertility," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 22(21), pages 635-662, April.

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