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

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Author Info
Beblo, Miriam
Wolf, Elke
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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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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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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. Kunze, Astrid, 2002. "The Timing of Careers and Human Capital Depreciation," IZA Discussion Papers 509, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-80, October. [Downloadable!] (restricted)
    Other versions:
  3. 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:
  4. 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. [Downloadable!]
    Other versions:
  5. Fitzenberger, Bernd & Wunderlich, Gaby, 2000. "Gender wage differences in West Germany : a cohort analysis," ZEW Discussion Papers 00-48, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  6. 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)
  7. Albrecht, James W. & Edin, Per-Anders & Sundström, Marianne & Vroman, Susan B., 1996. "Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data," Working Paper Series 1996:23, Uppsala University, Department of Economics.
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  8. 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. [Downloadable!] (restricted)
  9. 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. [Downloadable!]
  10. Hausman, Jerry A. & Taylor, William E., 1981. "Panel data and unobservable individual effects," Journal of Econometrics, Elsevier, vol. 16(1), pages 155-155, May. [Downloadable!] (restricted)
  11. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-98, November. [Downloadable!] (restricted)
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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. Görlich Dennis & Grip Andries de, 2007. "Human Capital Depreciation during Family-related Career Interruptions in Male and Female Occupations," Research Memoranda 007, Maastricht : ROA, Research Centre for Education and the Labour Market. [Downloadable!]
    Other versions:
  2. 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]. [Downloadable!]
  3. 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. [Downloadable!]
  4. Uta Schönberg & Johannes Ludsteck, 2007. "Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap," IZA Discussion Papers 2699, Institute for the Study of Labor (IZA). [Downloadable!]
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