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Work and Wage Dynamics around Childbirth

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  • Mette Ejrnæs
  • Astrid Kunze

Abstract

This study investigates how the first childbirth affects the wage processes of highly attached women. We estimate a flexible fixed effects wage regression model extended with post-birth fixed effects by the control function approach. Register data on West Germany are used and we exploit the expansionary family policy during the late 1980s and 1990s for identification. On the return to work after the birth, mothers’ wages drop by 3 to 5.7 per cent per year of leave. We find negative selection back to full-time work after birth. We discuss policy implications regarding statistical discrimination and results on family gap.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2012/wp-cesifo-2012-01/cesifo1_wp3710.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3710.

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Date of creation: 2012
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Handle: RePEc:ces:ceswps:_3710

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Keywords: wages; parental leave; human capital; return to work; non-random selection;

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References

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  1. Lundberg, Shelly & Rose, Elaina, 2000. "Parenthood and the earnings of married men and women," Labour Economics, Elsevier, vol. 7(6), pages 689-710, November.
  2. Richard Blundell & Monica Costa Dias, 2002. "Alternative approaches to evaluation in empirical microeconomics," CeMMAP working papers CWP10/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  3. Nielsen, Helena Skyt & Simonsen, Marianne & Verner, Mette, 2002. "Does the Gap in Family-friendly Policies Drive the Family Gap?," Working Papers 02-19, University of Aarhus, Aarhus School of Business, Department of Economics.
  4. Datta Gupta, Nabanita & Smith, Nina, 2002. "Children and Career Interruptions: The Family Gap in Denmark," Economica, London School of Economics and Political Science, vol. 69(276), pages 609-29, November.
  5. Mette Ejrnæs & Astrid Kunze, 2004. "Wage Dips and Drops around First Birth," CAM Working Papers 2004-01, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  6. Deborah J. Anderson & Melissa Binder & Kate Krause, 2002. "The Motherhood Wage Penalty: Which Mothers Pay It and Why?," American Economic Review, American Economic Association, vol. 92(2), pages 354-358, May.
  7. Simon Burgess & Paul Gregg & Carol Propper & Elizabeth Washbrook & ALSPAC Study Team, 2002. "Maternity Rights and Mothers' Return to Work," The Centre for Market and Public Organisation 02/055, Department of Economics, University of Bristol, UK.
  8. Ondrich, Jan & Spiess, C Katharina & Yang, Qing, 1996. "Barefoot and in a German Kitchen: Federal Parental Leave and Benefit Policy and the Return to Work after Childbirth in Germany," Journal of Population Economics, Springer, vol. 9(3), pages 247-66, August.
  9. Christopher J. Ruhm, 1996. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," NBER Working Papers 5688, National Bureau of Economic Research, Inc.
  10. Jan Ondrich & C. Spiess & Qing Yang & Gert Wagner, 2003. "The Liberalization of Maternity Leave Policy and the Return to Work after Childbirth in Germany," Review of Economics of the Household, Springer, vol. 1(1), pages 77-110, January.
  11. Schönberg, Uta & Ludsteck, Johannes, 2007. "Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap," IZA Discussion Papers 2699, Institute for the Study of Labor (IZA).
  12. Davies, Rhys & Pierre, Gaelle, 2005. "The family gap in pay in Europe: a cross-country study," Labour Economics, Elsevier, vol. 12(4), pages 469-486, August.
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Citations

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Cited by:
  1. Bernd Fitzenberger & Katrin Sommerfeld & Susanne Steffes, 2013. "Causal Effects on Employment after First Birth: A Dynamic Treatment Approach," SOEPpapers on Multidisciplinary Panel Data Research 576, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Grund, Christian, 2014. "Gender Pay Gaps among Highly Educated Professionals: Compensation Components Do Matter," IZA Discussion Papers 8112, Institute for the Study of Labor (IZA).
  3. Franz, Nele, 2014. "Maternity leave and its consequences for subsequent careers in Germany," CIW Discussion Papers 1/2014, University of Münster, Center for Interdisciplinary Economics (CIW).
  4. Joseph, Olivier & Pailhé, Ariane & Recotillet, Isabelle & Solaz, Anne, 2013. "The economic impact of taking short parental leave: Evaluation of a French reform," Labour Economics, Elsevier, vol. 25(C), pages 63-75.
  5. Xiaoyan Chen Youderian, 2014. "The motherhood wage penalty and non-working women," Economics Bulletin, AccessEcon, vol. 34(2), pages 757-765.
  6. Kaiser, Lutz C., 2014. "The Gender-Career Estimation Gap," IZA Discussion Papers 8185, Institute for the Study of Labor (IZA).
  7. Lia Pacelli & Silvia Pasqua & Claudia Villosio, 2013. "Labor Market Penalties for Mothers in Italy," Journal of Labor Research, Springer, vol. 34(4), pages 408-432, December.
  8. Marit Rønsen & Ragni Hege Kitterød, 2012. "Entry into work following childbirth among mothers in Norway. Recent trends and variation," Discussion Papers 702, Research Department of Statistics Norway.

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