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Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap

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Author Info
Uta Schönberg () (University of Rochester and IZA)
Johannes Ludsteck () (IAB, Nuremberg)

Additional information is available for the following registered author(s):

Abstract

This paper analyzes the impact of expansions in leave coverage on mothers’ labor market outcomes after childbirth. The focus is on Germany, a country that underwent several changes in maternity leave legislation since the late 70s. We identify the causal impact of an expansion in maternity leave by comparing labor market outcomes of women who gave birth shortly (i.e. one month) before and after a change in maternity leave legislation. There is strong evidence that each expansion induced women to delay their return to work. Despite this strong short-term effect, the expansions had little impact on women’s labor supply in the long-run. The expansion from 2 to 6 months reduced women’s wages, even 8 years after childbirth. This effect is mostly explained by the delay in the return to work. The delay in the return to work caused by the expansions in leave from 6 to 10 months and 18 to 36 months also lowered wages. However, this negative effect is offset by a positive selection effect, resulting in a zero or even positive overall effect.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2699.

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Length: 63 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2699

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Related research
Keywords: gender; human capital; parental leave;

Find related papers by JEL classification:
J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Michael Baker & Kevin Milligan, 2005. "How Does Job-Protected Maternity Leave Affect Mothers' Employment and Infant Health?," NBER Working Papers 11135, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Thomas Bauer & Stefan Bender & Holger Bonin, 2004. "Dismissal Protection and Worker Flows in Small Establishments," RWI Discussion Papers 0014, Rheinisch-Westfälisches Institut für Wirtschaftsforschung. [Downloadable!]
    Other versions:
  3. John Ekberg & Rickard Eriksson & Guido Friebel, 2005. "Parental Leave - A Policy Evaluation of the Swedish "Daddy-Month" Reform," IZA Discussion Papers 1617, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Kunze, Astrid, 2002. "The Timing of Careers and Human Capital Depreciation," IZA Discussion Papers 509, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Charles L. Baum II, 2003. "The Effects of Maternity Leave Legislation on Mothers' Labor Supply after Childbirth," Southern Economic Journal, Southern Economic Association, vol. 69(4), pages 772-799, April.
  6. 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. [Downloadable!]
    Other versions:
  7. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S76-S108, Part II, . [Downloadable!] (restricted)
    Other versions:
  8. Ondrich, Jan & Spiess, Katharina C. & Yang, Qing & Wagner, Gerd G., 1998. "The Liberalisation of Maternity Leave Policy and the Return to the Work of Childbirth in Germany," IZA Discussion Papers 21, Institute for the Study of Labor (IZA).
  9. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall. [Downloadable!] (restricted)
    Other versions:
  10. 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. [Downloadable!]
  11. Light, Audrey & Ureta, Manuelita, 1995. "Early-Career Work Experience and Gender Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 121-54, January. [Downloadable!] (restricted)
  12. Hashimoto, Masanori & Percy, Rick & Schoellner, Teresa & Weinberg, Bruce A., 2004. "The Long and Short of It: Maternity Leave Coverage and Women’s Labor Market Outcomes," IZA Discussion Papers 1207, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Ruhm, Christopher J., 2000. "Parental leave and child health," Journal of Health Economics, Elsevier, vol. 19(6), pages 931-960, November. [Downloadable!] (restricted)
    Other versions:
  14. 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. [Downloadable!]
    Other versions:
  15. 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. [Downloadable!] (restricted)
    Other versions:
  16. Rafael Lalive & Josef Zweimüller, . "Does Parental Leave Affect Fertility and Return-to-Work? Evidence from a ”True Natural Experiment”," IEW - Working Papers iewwp242, Institute for Empirical Research in Economics - IEW. [Downloadable!]
    Other versions:
  17. Beblo, Miriam & Wolf, Elke, 2002. "Wage Penalties for Career Interruptions : An Empirical Analysis for West Germany," ZEW Discussion Papers 02-45, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  18. Lawrence M. Berger & Jane Waldfogel, 2004. "Maternity leave and the employment of new mothers in the United States," Journal of Population Economics, Springer, vol. 17(2), pages 331-349, 06. [Downloadable!] (restricted)
  19. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," NBER Working Papers 8983, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  20. Christopher J. Ruhm, 1998. "The Economic Consequences Of Parental Leave Mandates: Lessons From Europe," The Quarterly Journal of Economics, MIT Press, vol. 113(1), pages 285-317, February. [Downloadable!] (restricted)
    Other versions:
  21. Sakiko Tanaka, 2005. "Parental leave and child health across OECD countries," Economic Journal, Royal Economic Society, vol. 115(501), pages F7-F28, 02. [Downloadable!] (restricted)
  22. Waldfogel, Jane, 1998. "The Family Gap for Young Women in the United States and Britain: Can Maternity Leave Make a Difference?," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 505-45, July. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dustmann, Christian & Schönberg, Uta, 2008. "The Effect of Expansions in Maternity Leave Coverage on Children's Long-Term Outcomes," IZA Discussion Papers 3605, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Schönberg, Uta, 2008. "Does the IABS reliably identify maternity leave taking?," FDZ Methodenreport 200803_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  3. Natalie Chen & Paola Conconi & Carlo Perroni, 2007. "Women's Earning Power and the "Double Burden" of Market and Household Work," SOEPpapers 20, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
    Other versions:
  4. Katrin Sommerfeld, 2008. "Older Babies - More Active Mothers?: How Maternal Labor Supply Changes as the Child Grows," SOEPpapers 143, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
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