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The Career Costs of Children

Author Info

Listed author(s):
  • Adda, Jérôme

    ()

    (Bocconi University)

  • Dustmann, Christian

    ()

    (University College London)

  • Stevens, Katrien

    ()

    (University of Sydney)

Abstract

This paper analyzes the life-cycle career costs associated with child rearing and decomposes their effects into unearned wages (as women drop out of the labor market), loss of human capital, and selection into more child-friendly occupations. We estimate a dynamic life-cycle model of fertility, occupational choice, and labor supply using detailed survey and administrative data for Germany for numerous birth cohorts across different regions. We use this model to analyze both the male-female wage gap as it evolves from labor market entry onward and the effect of pro-fertility policies. We show that a substantial portion of the gender wage gap is explainable by realized and expected fertility and that the long-run effect of policies encouraging fertility are considerably lower than the short-run effects typically estimated in the literature.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6201.

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Length: 67 pages
Date of creation: Dec 2011
Publication status: forthcoming in: Journal of Political Economy
Handle: RePEc:iza:izadps:dp6201
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Keywords: fertility; labor supply; occupational choice;

Other versions of this item:

Find related papers by JEL classification:
  • J1 - Labor and Demographic Economics - - Demographic Economics
  • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
  • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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