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Parental Leave Duration and Wages: A Structural Approach

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  • Laurent Lequien

    () (CREST)

Abstract

We investigate the existence of causal mechanisms from parental leave duration to subsequent wages. Our instrumental variable is a French reform giving financial incentives to take a parental leave. Two longitudinal datasets provide us with information on wages and familial background from 1976 to 2005. In our context, panel data estimations potentially suffer from unobserved heterogeneity, endogeneity and selection. We implement an innovative procedure proposed by Semykina and Wooldridge (2010) to take into account these three problems simultaneously. We find that parental leave duration has a significant and negative causal impact on later wages

Suggested Citation

  • Laurent Lequien, 2012. "Parental Leave Duration and Wages: A Structural Approach," Working Papers 2012-04, Center for Research in Economics and Statistics.
  • Handle: RePEc:crs:wpaper:2012-04
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    References listed on IDEAS

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    1. Ekberg, John & Eriksson, Rickard & Friebel, Guido, 2013. "Parental leave — A policy evaluation of the Swedish “Daddy-Month” reform," Journal of Public Economics, Elsevier, vol. 97(C), pages 131-143.
    2. Jan Ondrich & Katharina C. Spieß & Qing Yang, 2002. "The Effect of Maternity Leave on Women's Pay in Germany 1984-1994," Discussion Papers of DIW Berlin 289, DIW Berlin, German Institute for Economic Research.
    3. Kunze, Astrid & Ejrnæs, Mette, 2004. "Wage Dips and Drops around First Birth," IZA Discussion Papers 1011, Institute for the Study of Labor (IZA).
    4. Green, Francis, 2010. "Well-being, job satisfaction and labour mobility," Labour Economics, Elsevier, vol. 17(6), pages 897-903, December.
    5. Michael P. Keane & Kenneth I. Wolpin, 2002. "Estimating Welfare Effects Consistent with Forward-Looking Behavior. Part I: Lessons from a Simulation Exercise," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 570-599.
    6. Robert Jäckle & Oliver Himmler, 2010. "Health and Wages: Panel Data Estimates Considering Selection and Endogeneity," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).
    7. Rafael Lalive & Josef Zweim�ller, "undated". "Does Parental Leave Affect Fertility and Return-to-Work? Evidence from a �True Natural Experiment�," IEW - Working Papers 242, Institute for Empirical Research in Economics - University of Zurich.
    8. Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, vol. 68(1), pages 115-132, July.
    9. Semykina, Anastasia & Wooldridge, Jeffrey M., 2010. "Estimating panel data models in the presence of endogeneity and selection," Journal of Econometrics, Elsevier, vol. 157(2), pages 375-380, August.
    10. James W. Albrecht & Per-Anders Edin & Marianne Sundström & Susan B. Vroman, 1999. "Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 294-311.
    11. Bianca Buligescu & Denis de Crombrugghe & Gülçin Menteşoğlu & Raymond Montizaan, 2009. "Panel estimates of the wage penalty for maternal leave," Oxford Economic Papers, Oxford University Press, vol. 61(suppl_1), pages 35-55, April.
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    Cited by:

    1. Givord, Pauline & Marbot, Claire, 2015. "Does the cost of child care affect female labor market participation? An evaluation of a French reform of childcare subsidies," Labour Economics, Elsevier, vol. 36(C), pages 99-111.

    More about this item

    Keywords

    Parental leave duration; wages; selection; endogeneity; panel data;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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