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Economic Incentives or Social Norms? Labor Supply Differentials between East and West German Mothers

Author

Listed:
  • Bastien Chabé-Ferret

    (Middlesex University & IZA@LISER)

  • Zainab Iftikhar

    (University of Bonn & CEPR)

  • JungJae Park

    (Yonsei University)

Abstract

This paper quantifies the contributions of social norms and economic incentives to the 350-hour annual gap in maternal labor supply between East and West Germany. Using a collective model of family formation and labor supply estimated on GSOEP data from 2000–2017, we find that the working-mother stigma accounts for 73 percent of the gap. Economic factors partially offset the norm: higher Western wages raise the opportunity cost of staying home, so equalizing wages in West to the levels in East would nearly double the gap. We show that standard policy reforms may actually widen the regional disparity, and that their effectiveness is conditional on the norm being present: once removed, the same policies have negligible effects.

Suggested Citation

  • Bastien Chabé-Ferret & Zainab Iftikhar & JungJae Park, 2026. "Economic Incentives or Social Norms? Labor Supply Differentials between East and West German Mothers," ECONtribute Discussion Papers Series 405, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:405
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    File URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_405_2026.pdf
    File Function: First version, 2026
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    More about this item

    Keywords

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    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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