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Does It Pay to Be a Woman?: Labour Demand Effects of Maternity-Related Job Protection and Replacement Incomes

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  • Beatrice Scheubel

Abstract

In countries with strong employment protection laws it is often considered to be unwise to hire a woman in childbearing age because she might get pregnant. However, such labour demand e ects of job protection measures related to maternity leave are often rather anecdotal. To provide analytical evidence, this paper studies the impact of changes in maternity-related job protection in Germany on employment opportunities for women in childbearing age without children for whom the observed e ects should be largely demand-related. Exogenous, discrete policy changes in the German labour market of the 1980s and 1990s constitute the setting for a difference-in-differences analysis of the transition into employment as well as wages. The data for this study are taken from the German Socio-Economic Panel and from the German Microcensus. Doubling the job-protected leave period from 6 months to 12 months between 1986 and 1988 led to an approximately 6% lower probability of being hired for women in childbearing age without a university degree.In addition, I nd a 5-10% increase in wages for women in childbearing age associated with the latter reform. Since this effect disappears when controlling for having a child in the future, this may indicate an increased need to signal commitment by increased effort after the reform.

Suggested Citation

  • Beatrice Scheubel, 2014. "Does It Pay to Be a Woman?: Labour Demand Effects of Maternity-Related Job Protection and Replacement Incomes," SOEPpapers on Multidisciplinary Panel Data Research 685, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp685
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    More about this item

    Keywords

    Maternity leave legislation; gender pay gap; education; unemployment; difference-in-differences with group-correlated errors; quasi-natural experiment;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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