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Work and Wage Dynamics around Childbirth

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  • Mette Ejrnæs
  • Astrid Kunze

Abstract

This study investigates how the first childbirth affects the wage processes of highly attached women. We estimate a flexible fixed effects wage regression model extended with post-birth fixed effects by the control function approach. Register data on West Germany are used and we exploit the expansionary family policy during the late 1980s and 1990s for identification. On the return to work after the birth, mothers' wages drop by 3 to 5.7 per cent per year of leave. We find negative selection back to full-time work after birth. We discuss policy implications regarding statistical discrimination and results on family gap.
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Suggested Citation

  • Mette Ejrnæs & Astrid Kunze, 2013. "Work and Wage Dynamics around Childbirth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(3), pages 856-877, July.
    • Handle: RePEc:bla:scandj:v:115:y:2013:i:3:p:856-877
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    File URL: http://hdl.handle.net/10.1111/sjoe.2013.115.issue-3
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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • 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
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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