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Time Is Money: The Influence of Parenthood Timing on Wages

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  • Michael Kind
  • Jan Kleibrink

Abstract

This paper studies the effect of parenthood timing on future wages. Using data from the German Socio-Economic Panel (SOEP), we employ an instrumental variable approach to identify the causal effect of delaying parenthood on wages of mothers and fathers. Consistent with previous studies, we provide evidence for a positive delaying effect on wages. We further study the underlying mechanisms of the wage premium, paying particular attention to the relationship between career stage and fertility timing. We find that delaying parenthood by one additional year during the career implies a wage premium of 7%.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.407220.de/diw_sp0467.pdf
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Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 467.

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Length: 19 p.
Date of creation: 2012
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp467

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Keywords: Fertility; Wage Differentials; Career Path;

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References

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  1. 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.
  2. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, American Economic Association, vol. 85(5), pages 1278-86, December.
  3. Amalia Miller, 2011. "The effects of motherhood timing on career path," Journal of Population Economics, Springer, Springer, vol. 24(3), pages 1071-1100, July.
  4. Light, Audrey & Ureta, Manuelita, 1995. "Early-Career Work Experience and Gender Wage Differentials," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 13(1), pages 121-54, January.
  5. Blackburn, McKinley L & Bloom, David E & Neumark, David, 1993. "Fertility Timing, Wages, and Human Capital," Journal of Population Economics, Springer, Springer, vol. 6(1), pages 1-30.
  6. Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, National Bureau of Economic Research, Inc, in: Marriage, Family, Human Capital, and Fertility, pages 76-110 National Bureau of Economic Research, Inc.
  7. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0151, National Bureau of Economic Research, Inc.
  8. 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-.
  9. Kasey Buckles, 2008. "Understanding the Returns to Delayed Childbearing for Working Women," American Economic Review, American Economic Association, American Economic Association, vol. 98(2), pages 403-07, May.
  10. 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.
  11. John P. Haisken-DeNew & Markus H. Hahn, 2010. "PanelWhiz: Efficient Data Extraction of Complex Panel Data Sets - An Example Using the German SOEP," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 130(4), pages 643-654.
  12. Blau, David M & Robins, Philip K, 1988. "Child-Care Costs and Family Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 374-81, August.
  13. Elizabeth Ty Wilde & Lily Batchelder & David T. Ellwood, 2010. "The Mommy Track Divides: The Impact of Childbearing on Wages of Women of Differing Skill Levels," NBER Working Papers 16582, National Bureau of Economic Research, Inc.
  14. Jacob Mincer & Solomon Polacheck, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, National Bureau of Economic Research, Inc, in: Economics of the Family: Marriage, Children, and Human Capital, pages 397-431 National Bureau of Economic Research, Inc.
  15. Joshi, Heather & Paci, Pierella & Waldfogel, Jane, 1999. "The Wages of Motherhood: Better or Worse?," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 23(5), pages 543-64, September.
  16. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
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