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Effect of early parenthood on parents' earnings in the Baltics

Author

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  • Nerijus Cerniauskas

    (Vilniaus Universitetas)

Abstract

Parenthood, especially in the first years after childbirth, is unevenly split between genders and varies by country. In countries like the three Baltic states, with relatively generous parental leave benefits compared to the EU and norms encouraging mothers to care for children, females' earnings are more affected than their male counterparts. I carry out an event study to estimate the effect of having a child on the earnings of both genders and find that the earnings of females reduce by half in the first calendar year after childbirth and by 20% to 33% in the second, while male earnings do not change in either period. This results in a widening earnings gap in the Baltics, more so than in several comparison countries (Denmark, Finland, Sweden, the Netherlands, and Norway), in the first two years after the birth of the first child.

Suggested Citation

  • Nerijus Cerniauskas, 2022. "Effect of early parenthood on parents' earnings in the Baltics," GRAPE Working Papers 74, GRAPE Group for Research in Applied Economics.
    • Handle: RePEc:fme:wpaper:74
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    File URL: http://grape.org.pl/WP/74_Cerniauskas_website.pdf
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    References listed on IDEAS

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    1. Henrik Kleven & Camille Landais & Jakob Egholt Søgaard, 2019. "Children and Gender Inequality: Evidence from Denmark," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 181-209, October.
    2. Henrik Kleven & Camille Landais & Johanna Posch & Andreas Steinhauer & Josef Zweimüller, 2019. "Child Penalties across Countries: Evidence and Explanations," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 122-126, May.
    3. Nikolay Angelov & Per Johansson & Erica Lindahl, 2016. "Parenthood and the Gender Gap in Pay," Journal of Labor Economics, University of Chicago Press, vol. 34(3), pages 545-579.
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    Keywords

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    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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