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New Evidence on the Motherhood Wage Gap

  • Amuedo-Dorantes, Catalina

    ()

    (San Diego State University)

  • Kimmel, Jean

    ()

    (Western Michigan University)

Using data from the 1979 National Longitudinal Survey of Youth, we assess the role of employment-based health insurance offers in explaining the motherhood wage gap. Researchers have been aware of the existence of a motherhood gap for many years; yet, the literature has failed to address the role of non-wage compensation in explaining the motherhood wage gap despite the increasing importance of non-wage benefits in total compensation packages. As hedonic wage theory suggests, mothers might view health benefits as desirable and trade-off wages for health insurance. Thus, lower wages for mothers might reflect their relative preferences for jobs offering health insurance. We estimate an endogenous switching wage equation model to account for the self-selection and, thus, endogeneity of having an employment-based health insurance offer. We find that, once the endogeneity of having an employment-based health insurance offer is accounted for, the motherhood wage gap disappears.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3662.

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Length: 30 pages
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3662
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  1. Nielsen, Helena Skyt & Simonsen, Marianne & Verner, Mette, 2002. "Does the Gap in Family-friendly Policies Drive the Family Gap?," Working Papers 02-19, University of Aarhus, Aarhus School of Business, Department of Economics.
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  13. Catalina Amuedo-Dorantes & Jean Kimmel, 2004. "The Motherhood Wage Gap for Women in the United States: The Importance of College and Fertility Delay," Economic Working Papers at Centro de Estudios Andaluces E2004/07, Centro de Estudios Andaluces.
  14. Blackburn, McKinley L & Bloom, David E & Neumark, David, 1993. "Fertility Timing, Wages, and Human Capital," Journal of Population Economics, Springer, vol. 6(1), pages 1-30.
  15. Deborah J. Anderson & Melissa Binder & Kate Krause, 2003. "The motherhood wage penalty revisited: experience, heterogeneity, work effort, and work-schedule flexibility," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(2), pages 273-294, January.
  16. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June.
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  18. Elaine McCrate, 2005. "Flexible Hours, Workplace Authority, And Compensating Wage Differentials In The Us," Feminist Economics, Taylor & Francis Journals, vol. 11(1), pages 11-39.
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