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Wage Penalties for Career Interruptions: An Empirical Analysis for West Germany

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  • Beblo, Miriam
  • Wolf, Elke
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    Abstract

    This paper examines the wage effects of different types of career interruptions. We consider the timing and duration of non-employment spells by exploiting an administrative data set of German social security accounts (IAB employment sample) supplemented with information on the employees? entire working lives (IAB supplement sample I). These data allow us to distinguish between employment breaks due to registered unemployment, formal parental leave, training or other reasons – a distinction which can only be approximated using just the IAB employment sample. Our IV fixed effects estimation results suggest that women?s labor supply is endogenously determined, whereas men?s employment histories can be treated as exogenous. Career interruptions reduce the wage rates of both men and women. Moreover, the wage cuts resulting from unemployment, parental leave and additional home time are larger than the pure human capital effects of missing experience, hinting at a possible stigmatization of workers with discontinuous employment histories. --

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    Bibliographic Info

    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 02-45.

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    Date of creation: 2002
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    Handle: RePEc:zbw:zewdip:673

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    Related research

    Keywords: career interruptions; returns to experience; wage differentials; panel estimation;

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    References

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    1. Beblo, Miriam & Wolf, Elke, 2000. "How much does a year off cost? Estimating the wage effects of employment breaks and part-time periods," ZEW Discussion Papers 00-69, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Gubta, Nabanita Datta & Smith, Nina, 2000. "Children and Career Interruptions: The Family Gap in Denmark," CLS Working Papers 00-3, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
    3. Robert Gibbons & Lawrence Katz, 1989. "Layoffs and Lemons," NBER Working Papers 2968, National Bureau of Economic Research, Inc.
    4. Albrecht, J & Edin, P-A & Sundstrom, M & Vroman, S-B, 1996. "Career Interruptions and Subsequent Earning : A Reexamination Using Swedish Data," Papers 1996-23, Uppsala - Working Paper Series.
    5. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-98, November.
    6. Moon-Kak Kim & Solomon W. Polachek, 1994. "Panel Estimates of Male-Female Earnings Functions," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 406-428.
    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, .
    8. Jacob Mincer & Solomon Polacheck, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 397-431 National Bureau of Economic Research, Inc.
    9. Bernd Fitzenberger & Gaby Wunderlich, 2002. "Gender Wage Differences in West Germany: A Cohort Analysis," German Economic Review, Verein für Socialpolitik, vol. 3(4), pages 379-414, November.
    10. 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.
    11. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-29, April.
    12. repec:iza:izadps:dp509 is not listed on IDEAS
    13. Knut Gerlach, 1987. "A Note on Male-Female Wage Differences in West Germany," Journal of Human Resources, University of Wisconsin Press, vol. 22(4), pages 584-592.
    14. 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.
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    Cited by:
    1. repec:iab:iabzaf:v:38:i:2/3:p:341-356 is not listed on IDEAS
    2. Alewell, Dorothea & Pull, Kerstin, 2005. "Rechtsschutz für Mütter : eine ökonomische Analyse des Mutterschutzgesetzes und seiner Wirkungen auf die Beschäftigungssituation von Frauen (Legal protection for mothers * an economic analysis of ," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(2/3), pages 341-356.
    3. Anne Busch & Elke Holst, 2011. "Gender-Specific Occupational Segregation, Glass Ceiling Effects, and Earnings in Managerial Positions: Results of a Fixed Effects Model," Discussion Papers of DIW Berlin 1101, DIW Berlin, German Institute for Economic Research.
    4. Beblo, Miriam & Wolf, Elke, 2003. "Sind es die Erwerbsunterbrechungen? : ein Erklärungsbeitrag zum Lohnunterschied zwischen Frauen und Männern in Deutschland (Is it the employment interruptions? * a contribution to explaining the wag," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 560-572.
    5. Görlich Dennis & Grip Andries de, 2007. "Human Capital Depreciation during Family-related Career Interruptions in Male and Female Occupations," ROA Research Memorandum 007, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    6. repec:iab:iabmit:v:36:i:4:p:560-572 is not listed on IDEAS
    7. Wolf, Elke & Heinze, Anja, 2007. "How to Limit Discrimination? Analyzing the Effects of Innovative Workplace Practices on Intra-Firm Gender Wage Gaps Using Linked Employer-Employee Data," ZEW Discussion Papers 07-077, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. Beblo, Miriam & Bender, Stefan & Wolf, Elke, 2006. "The wage effects of entering motherhood: a within-firm matching approach," ZEW Discussion Papers 06-53, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. Beblo, Miriam & Bender, Stefan & Wolf, Elke, 2006. "The wage effects of entering motherhood : a within-firm matching approach," IAB Discussion Paper 200613, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Potrafke, Niklas, 2012. "Unemployment, human capital depreciation and pension benefits: An empirical evaluation of German data," Munich Reprints in Economics 19271, University of Munich, Department of Economics.
    11. 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).
    12. Dorothea Alewell & Kerstin Pull, 2005. "Die Neugestaltung der Finanzierung des Mutterschutzes - ein Kommentar zum Mutterschutz-Urteil des Bundesverfassungsgerichtes," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 58(04), pages 22-27, 02.
    13. repec:iab:iabmit:v:36:i:4:p:539-559 is not listed on IDEAS
    14. Buligescu Bianca & Crombrugghe Denis de & Mentesoglu Gülcin & Montizaan Raymond, 2008. "Estimating the wage penalty for maternal leave," ROA Research Memorandum 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    15. Niklas Potrafke, 2007. "The Timing of Employment Breaks: How Does It Affect Pension Benefits? ; Empirical Evidence from Germany," Discussion Papers of DIW Berlin 710, DIW Berlin, German Institute for Economic Research.
    16. J.D. Vlasblom & J. Plantenga, 2010. "Career effects of taking up parental leave. Evidence from a Dutch University," Working Papers 10-14, Utrecht School of Economics.
    17. Hübler, Olaf, 2003. "Geschlechtsspezifische Lohnunterschiede (Gender-specific wage differentials)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 539-559.

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