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International Differences in the Family Gap in Pay: The Role of Labor Market Institutions

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  • Dupuy, Arnaud

    ()
    (CEPS/INSTEAD)

  • Fernández-Kranz, Daniel

    ()
    (IE Business School, Madrid)

Abstract

Using microdata for 35 countries over the period 1985-1994-2002 we find that labor market institutions traditionally associated to more compressed wage structures are associated to a higher family gap. Our results indicate that these policies reduce the price effect of having children but aggravate the human capital loss due to motherhood. We also find evidence that policies that help women continue in the same job after childbirth decrease the family gap. Of all the countries we study, mothers in Southern Europe suffer the biggest family gap and our analysis indicates that this is due to the bad combination of labor market policies in these countries. Our results are robust to specification changes and indicate that the main reason mothers lag behind other women in terms of earnings is the loss of accumulated job market experience caused by career breaks around childbirth.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2719.

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Length: 38 pages
Date of creation: Mar 2007
Date of revision:
Publication status: published in: Applied Economics, 2011, 43(13), 413-438
Handle: RePEc:iza:izadps:dp2719

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Keywords: institutions; family gap;

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  1. Dolado, Juan J. & Jansen, Marcel & Jimeno, Juan Francisco, 2005. "Dual Employment Protection Legislation: A Framework for Analysis," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5033, C.E.P.R. Discussion Papers.
  2. 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.
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  6. 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.
  7. Deborah J. Anderson & Melissa Binder & Kate Krause, 2003. "The motherhood wage penalty revisited: experience, heterogeneity, work effort, and work-schedule flexibility," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(2), pages 273-294, January.
  8. Alícia Adserà, 2004. "Changing fertility rates in developed countries. The impact of labor market institutions," Journal of Population Economics, Springer, Springer, vol. 17(1), pages 17-43, February.
  9. Francine D. Blau & Lawrence M. Kahn, 2003. "Understanding International Differences in the Gender Pay Gap," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 21(1), pages 106-144, January.
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  11. Daniel L. Millimet, 1999. "The Impact of Children on Wages, Job Tenure, and the Division of Household Labor," Working Papers 99-13, Brown University, Department of Economics.
  12. Altug, Sumru & Miller, Robert A, 1998. "The Effect of Work Experience on Female Wages and Labour Supply," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 65(1), pages 45-85, January.
  13. Gronau, Reuben, 1988. "Sex-Related Wage Differentials and Women's Interrupted Labor Careers--The Chicken or the Egg," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 6(3), pages 277-301, July.
  14. 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, University of Chicago Press, vol. 16(3), pages 505-45, July.
  15. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 11(3), pages 37-54, Summer.
  16. Assar Lindbeck & Dennis J. Snower, 2001. "Insiders versus Outsiders," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 15(1), pages 165-188, Winter.
  17. Jane Waldfogel, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 12(1), pages 137-156, Winter.
  18. Shelley Phipps & Peter Burton & Lynn Lethbridge, 2001. "In and out of the labour market: long-term income consequences of child-related interruptions to women's paid work," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 34(2), pages 411-429, May.
  19. Waldfogel, Jane, 1995. "The Price of Motherhood: Family Status and Women's Pay in a Young British Cohort," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 584-610, October.
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Cited by:
  1. Helmut Rainer & Geethanjali Selvaretnam & David Ulph, 2011. "Assisted reproductive technologies (ART) in a model of fertility choice," Journal of Population Economics, Springer, Springer, vol. 24(3), pages 1101-1132, July.
  2. Luis Gamboa & Blanca Zuluaga, 2013. "Is There a Motherhood Penalty? Decomposing the Family Wage Gap in Colombia," Journal of Family and Economic Issues, Springer, Springer, vol. 34(4), pages 421-434, December.
  3. Isabell Koske & Jean-Marc Fournier & Isabelle Wanner, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 2. The Distribution of Labour Income," OECD Economics Department Working Papers 925, OECD Publishing.
  4. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).
  5. Alena Bicakova, 2010. "Gender Unemployment Gaps: Evidence from the New EU Member States," CERGE-EI Working Papers wp410, The Center for Economic Research and Graduate Education - Economic Institute, Prague.

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