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The Effect of Maternity Leave on Women's Pay in Germany 1984-1994

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Listed:
  • Jan Ondrich
  • Katharina C. Spieß
  • Qing Yang

Abstract

In 1986 German federal parental leave and benefit policy was expanded in several ways, extending the potential duration of leave from six to ten months and paying child-rearing benefits to all new mothers regardless of their employment status before childbirth. The potential duration has increased four times since 1986 and stood at 18 months in 1991 and three years starting in 1992. This study uses log-wage difference regressions to examine the effect of leave taken by the mother on wage growth for two 5-year periods, 1984-1989 and 1989-1994. In each of the fiveyear periods, taking maternity leave was found to have a significant negative effect on wage growth. Point estimates imply that each month of maternity leave reduced wage growth by 1.5 percent over five years. In addition, for the second five-year period only, mothers experienced lower wage growth if they chose to stay at home rather than return to work when the allowable leave period expired: from 1989 to 1994, a half-year out of the labor force after the end of the leave period lowered wage growth by an additional 15 percent over five years.

Suggested Citation

  • 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.
  • Handle: RePEc:diw:diwwpp:dp289
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    References listed on IDEAS

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    Cited by:

    1. Jane Waldfogel, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-156, Winter.
    2. Olivier Thévenon & Angela Luci, 2012. "Reconciling Work, Family and Child Outcomes: What Implications for Family Support Policies?," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 31(6), pages 855-882, December.
    3. Görlich Dennis & Grip Andries de, 2007. "Human Capital Depreciation during Family-related Career Interruptions in Male and Female Occupations," ROA Research Memorandum 007, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    4. Jane Waldfogel, 1999. "The impact of the family and medical leave act," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(2), pages 281-302.
    5. Laurent Lequien, 2012. "Parental Leave Duration and Wages: A Structural Approach," Working Papers 2012-04, Center for Research in Economics and Statistics.
    6. repec:spr:jlabrs:v:50:y:2017:i:1:d:10.1007_s12651-017-0226-4 is not listed on IDEAS
    7. Yusuf Emre Akgunduz & Janneke Plantenga, 2013. "Labour market effects of parental leave in Europe," Cambridge Journal of Economics, Oxford University Press, vol. 37(4), pages 845-862.

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