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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. Davies, Rhys & Pierre, Gaelle, 2005. "The family gap in pay in Europe: a cross-country study," Labour Economics, Elsevier, Elsevier, vol. 12(4), pages 469-486, August.
  2. Richard Blundell & Monica Costa Dias, 2002. "Alternative approaches to evaluation in empirical microeconomics," CeMMAP working papers, Centre for Microdata Methods and Practice, Institute for Fiscal Studies CWP10/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  3. Christopher J. Ruhm, 1996. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," NBER Working Papers 5688, National Bureau of Economic Research, Inc.
  4. 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, Department of Economics, University of Bristol, UK 02/055, Department of Economics, University of Bristol, UK.
  5. Helena Skyt Nielsen & Marianne Simonsen & Mette Verner, 2004. "Does the Gap in Family-friendly Policies Drive the Family Gap?," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 106(4), pages 721-744, December.
  6. Kunze, Astrid & Ejrnæs, Mette, 2004. "Wage Dips and Drops around First Birth," IZA Discussion Papers 1011, Institute for the Study of Labor (IZA).
  7. Gupta, N.D. & Smith, N., 2000. "Children and Career Interruptions: the Family Gap in Denmark," Papers, Centre for Labour Market and Social Research, Danmark- 00-03, Centre for Labour Market and Social Research, Danmark-.
  8. Lundberg, Shelly & Rose, Elaina, 2000. "Parenthood and the earnings of married men and women," Labour Economics, Elsevier, Elsevier, vol. 7(6), pages 689-710, November.
  9. Deborah J. Anderson & Melissa Binder & Kate Krause, 2002. "The Motherhood Wage Penalty: Which Mothers Pay It and Why?," American Economic Review, American Economic Association, American Economic Association, vol. 92(2), pages 354-358, May.
  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, Springer, vol. 1(1), pages 77-110, January.
  11. 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, Springer, vol. 9(3), pages 247-66, August.
  12. 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).
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Cited by:
  1. Marit Rønsen & Ragni Hege Kitterød, 2012. "Entry into work following childbirth among mothers in Norway. Recent trends and variation," Discussion Papers, Research Department of Statistics Norway 702, Research Department of Statistics Norway.
  2. Fitzenberger, Bernd & Sommerfeld, Katrin & Steffes, Susanne, 2013. "Causal effects on employment after first birth: A dynamic treatment approach," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 13-107, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Lia Pacelli & Silvia Pasqua & Claudia Villosio, 2013. "Labor Market Penalties for Mothers in Italy," Journal of Labor Research, Springer, Springer, vol. 34(4), pages 408-432, December.
  4. Kaiser, Lutz C., 2014. "The Gender-Career Estimation Gap," IZA Discussion Papers 8185, Institute for the Study of Labor (IZA).
  5. Xiaoyan Chen Youderian, 2014. "The motherhood wage penalty and non-working women," Economics Bulletin, AccessEcon, vol. 34(2), pages 757-765.
  6. Frühwirth-Schnatter, Sylvia & Pamminger, Christoph & Weber, Andrea & Winter-Ebmer, Rudolf, 2014. "When Is the Best Time to Give Birth?," IZA Discussion Papers 8396, Institute for the Study of Labor (IZA).
  7. 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, Elsevier, vol. 25(C), pages 63-75.
  8. 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).
  9. 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).

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