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The Career Costs of Children

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  • Jerome Adda
  • Christian Dustmann
  • Katrien Stevens

Abstract

This paper analyzes the life-cycle career costs associated with child rearing and decomposes their effects into unearned wages (as women drop out of the labor market), loss of human capital, and selection into more child-friendly occupations. We estimate a dynamic life-cycle model of fertility, occupational choice, and labor supply using detailed survey and administrative data for Germany for numerous birth cohorts across different regions. We use this model to analyze both the male-female wage gap as it evolves from labor market entry onward and the effect of pro-fertility policies. We show that a substantial portion of the gender wage gap is explainable by realized and expected fertility and that the long-run effect of policies encouraging fertility are considerably lower than the short-run effects typically estimated in the literature.

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Bibliographic Info

Paper provided by European University Institute in its series Economics Working Papers with number ECO2012/.

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Date of creation: 2012
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Handle: RePEc:eui:euiwps:eco2012/01

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Cited by:
  1. Marcus Klemm, 2012. "Job Security and Fertility: Evidence from German Reunification," Ruhr Economic Papers 0379, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Kristiina Huttunen & Jenni Kellokumpu, 2012. "The Effect of Job Displacement on Couples? Fertility Decisions," Working Papers 29, Government Institute for Economic Research Finland (VATT).
  3. Kruk, Eberhard, 2011. "The Effect of Children on Depression in Old Age," MEA discussion paper series 11249, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  4. Mike Brewer & Monica Costa Dias & Jonathan Shaw, 2012. "Lifetime inequality and redistribution," IFS Working Papers W12/23, Institute for Fiscal Studies.

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