IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp2699.html
   My bibliography  Save this paper

Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap

Author

Listed:
  • Schönberg, Uta

    (University College London)

  • Ludsteck, Johannes

    (Institut für Arbeitsmarkt- und Berufsforschung)

Abstract

This paper analyzes the impact of expansions in leave coverage on mothers’ labor market outcomes after childbirth. The focus is on Germany, a country that underwent several changes in maternity leave legislation since the late 70s. We identify the causal impact of an expansion in maternity leave by comparing labor market outcomes of women who gave birth shortly (i.e. one month) before and after a change in maternity leave legislation. There is strong evidence that each expansion induced women to delay their return to work. Despite this strong short-term effect, the expansions had little impact on women’s labor supply in the long-run. The expansion from 2 to 6 months reduced women’s wages, even 8 years after childbirth. This effect is mostly explained by the delay in the return to work. The delay in the return to work caused by the expansions in leave from 6 to 10 months and 18 to 36 months also lowered wages. However, this negative effect is offset by a positive selection effect, resulting in a zero or even positive overall effect.

Suggested Citation

  • Schönberg, Uta & Ludsteck, Johannes, 2007. "Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap," IZA Discussion Papers 2699, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2699
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp2699.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Deborah J. Anderson & Melissa Binder & Kate Krause, 2002. "The Motherhood Wage Penalty: Which Mothers Pay It and Why?," American Economic Review, American Economic Association, vol. 92(2), pages 354-358, May.
    2. Thomas K. Bauer & Stefan Bender & Holger Bonin, 2007. "Dismissal Protection and Worker Flows in Small Establishments," Economica, London School of Economics and Political Science, vol. 74(296), pages 804-821, November.
    3. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    4. Mette Ejrnæs & Astrid Kunze, 2002. "Wage dips and drops around the first birth," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 C2-4, International Conferences on Panel Data.
    5. Michael Baker & Kevin Milligan, 2005. "How Does Job-Protected Maternity Leave Affect Mothers' Employment and Infant Health?," NBER Working Papers 11135, National Bureau of Economic Research, Inc.
    6. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall.
    7. Jan Ondrich & C. Spiess & Qing Yang & Gert Wagner, 2003. "The Liberalization of Maternity Leave Policy and the Return to Work after Childbirth in Germany," Review of Economics of the Household, Springer, vol. 1(1), pages 77-110, January.
    8. Stacy Dickert-Conlin & Amitabh Chandra, 1999. "Taxes and the Timing of Birth," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 161-177, February.
    9. 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.
    10. Hashimoto, Masanori & Percy, Rick & Schoellner, Teresa & Weinberg, Bruce A., 2004. "The Long and Short of It: Maternity Leave Coverage and Women’s Labor Market Outcomes," IZA Discussion Papers 1207, Institute of Labor Economics (IZA).
    11. 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.
    12. Ondrich, Jan & Spieß, C. Katharina & Yang, Qing & Wagner, Gert G., 1998. "The Liberalisation of Maternity Leave Policy and the Return to the Work of Childbirth in Germany," IZA Discussion Papers 21, Institute of Labor Economics (IZA).
    13. Christopher J. Ruhm, 1998. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 285-317.
    14. 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.
    15. Yoshio Higuchi & Jane Waldfogel & Masahiro Abe, 1999. "Family leave policies and women's retention after childbirth: Evidence from the United States, Britain, and Japan," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(4), pages 523-545.
    16. Shelley Phipps & Peter Burton & Lynn Lethbridge, 2001. "In and out of the labour market: long‐term income consequences of child‐related interruptions to women's paid work," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(2), pages 411-429, May.
    17. repec:zbw:rwidps:0012 is not listed on IDEAS
    18. Ruhm, Christopher J., 2000. "Parental leave and child health," Journal of Health Economics, Elsevier, vol. 19(6), pages 931-960, November.
    19. Beblo, Miriam & Wolf, Elke, 2002. "Wage Penalties for Career Interruptions: An Empirical Analysis for West Germany," ZEW Discussion Papers 02-45, ZEW - Leibniz Centre for European Economic Research.
    20. Kunze, Astrid, 2002. "The Timing of Careers and Human Capital Depreciation," IZA Discussion Papers 509, Institute of Labor Economics (IZA).
    21. Light, Audrey & Ureta, Manuelita, 1995. "Early-Career Work Experience and Gender Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 121-154, January.
    22. Sakiko Tanaka, 2005. "Parental leave and child health across OECD countries," Economic Journal, Royal Economic Society, vol. 115(501), pages 7-28, February.
    23. Burgess, Simon & Gregg, Paul & Propper, Carol & Washbrook, Elizabeth, 2008. "Maternity rights and mothers' return to work," Labour Economics, Elsevier, vol. 15(2), pages 168-201, April.
    24. repec:zbw:rwidps:0014 is not listed on IDEAS
    25. repec:bla:econom:v:69:y:2002:i:276:p:609-29 is not listed on IDEAS
    26. Charles L. Baum II, 2003. "The Effects of Maternity Leave Legislation on Mothers' Labor Supply after Childbirth," Southern Economic Journal, John Wiley & Sons, vol. 69(4), pages 772-799, April.
    27. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
    28. Lawrence M. Berger & Jane Waldfogel, 2004. "Maternity leave and the employment of new mothers in the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(2), pages 331-349, June.
    29. Waldfogel, Jane, 1998. "The Family Gap for Young Women in the United States and Britain: Can Maternity Leave Make a Difference?," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 505-545, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maya Rossin-Slater, 2017. "Maternity and Family Leave Policy," NBER Working Papers 23069, National Bureau of Economic Research, Inc.
    2. Rossin-Slater, Maya, 2017. "Maternity and Family Leave Policy," IZA Discussion Papers 10500, Institute of Labor Economics (IZA).
    3. Joyce P. Jacobsen, 2009. "Accommodating Families," Chapters, in: Kenneth G. Dau-Schmidt & Seth D. Harris & Orly Lobel (ed.), Labor and Employment Law and Economics, chapter 11, Edward Elgar Publishing.
    4. Rafael Lalive & Analía Schlosser & Andreas Steinhauer & Josef Zweimüller, 2014. "Parental Leave and Mothers' Careers: The Relative Importance of Job Protection and Cash Benefits," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 219-265.
    5. Molina, José Alberto & Montuenga, Víctor M., 2008. "The Motherhood Wage Penalty in a Mediterranean Country: The Case of Spain," IZA Discussion Papers 3574, Institute of Labor Economics (IZA).
    6. Wen-Jui Han & Christopher Ruhm & Jane Waldfogel, 2009. "Parental leave policies and parents' employment and leave-taking," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(1), pages 29-54.
    7. Spieß, C. Katharina & Wrohlich, Katharina, 2006. "The Parental Leave Benefit Reform in Germany: Costs and Labour Market Outcomes of Moving towards the Scandinavian Model," IZA Discussion Papers 2372, Institute of Labor Economics (IZA).
    8. Geyer, Johannes & Haan, Peter & Spieß, C. Katharina & Wrohlich, Katharina, 2013. "Das Elterngeld und seine Wirkungen auf das Haushaltseinkommen junger Familien und die Erwerbstätigkeit von Müttern," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 25(2), pages 193-211.
    9. C. Spiess & Katharina Wrohlich, 2008. "The Parental Leave Benefit Reform in Germany: Costs and Labour Market Outcomes of Moving towards the Nordic Model," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 27(5), pages 575-591, October.
    10. Michael Baker & Kevin Milligan, 2005. "How Does Job-Protected Maternity Leave Affect Mothers' Employment and Infant Health?," NBER Working Papers 11135, National Bureau of Economic Research, Inc.
    11. Uta Schönberg & Johannes Ludsteck, 2014. "Expansions in Maternity Leave Coverage and Mothers' Labor Market Outcomes after Childbirth," Journal of Labor Economics, University of Chicago Press, vol. 32(3), pages 469-505.
    12. José Molina & Víctor Montuenga, 2009. "The Motherhood Wage Penalty in Spain," Journal of Family and Economic Issues, Springer, vol. 30(3), pages 237-251, September.
    13. Guyonne Kalb, 2018. "Paid Parental Leave and Female Labour Supply: AÂ Review," The Economic Record, The Economic Society of Australia, vol. 94(304), pages 80-100, March.
    14. Michael Baker & Kevin Milligan, 2008. "How Does Job-Protected Maternity Leave Affect Mothers' Employment?," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 655-691, October.
    15. Andres Erosa & Luisa Fuster & Diego Restuccia, 2010. "A General Equilibrium Analysis of Parental Leave Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(4), pages 742-758, October.
    16. Buligescu, B. & de Crombrugghe, D.P.I. & Mentesoglu, G. & Montizaan, R.M., 2008. "Estimating the wage penalty for maternal leave," ROA Research Memorandum 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    17. Görlich, Dennis & De Grip, Andries, 2007. "Human capital depreciation during family-related career interruptions in male and female occupations," Kiel Working Papers 1379, Kiel Institute for the World Economy (IfW Kiel).
    18. Astrid Kunze, 2017. "Types of absence from work and wages of young workers with apprenticeship training," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 51(1), pages 1-14, December.
    19. Barbara Hanel, 2013. "The Impact of Paid Maternity Leave Rights on Labour Market Outcomes," The Economic Record, The Economic Society of Australia, vol. 89(286), pages 339-366, September.
    20. Nizalova, Olena Y. & Sliusarenko, Tamara & Shpak, Solomiya, 2016. "The motherhood wage penalty in times of transition," Journal of Comparative Economics, Elsevier, vol. 44(1), pages 56-75.

    More about this item

    Keywords

    human capital; parental leave; gender;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2699. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.