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Wage Dips and Drops around First Birth

  • Mette Ejrnæs

    (Institute of Economics, University of Copenhagen)

  • Astrid Kunze

    (Norwegian School of Economics and Business Administration, Bergen)

We use a rich longitudinal data set for West Germany to disentangle the wage effects for female workers around first birth. Data on daily real wages reveal a dip in women’s real wages shortly before giving birth and a drop of 10 to 20 percent after finishing maternity leave and returning to the labour market. To pinpoint what drives the movement in wages around the first birth, we analyse the wages of women, taking into account the potential correlation of the duration of individual interruptions due to parental leave with other unobserved individually specific factors and non random sample selection. In order to identify the causes of the movements in wages we exploit the panel structure of the data, regional variations in access to child care and female unemployment rates, as well as policy changes, which increased the maximum duration of parental leave from 6 months to 3 years.

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File URL: http://www.econ.ku.dk/cam/wp0910/wp0203/2004-01.pdf/
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Paper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2004-01.

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Length: 33 pages
Date of creation: Jan 2004
Date of revision:
Handle: RePEc:kud:kuieca:2004_01
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Web page: http://www.econ.ku.dk/CAM/
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  1. Francine D. Blau & Lawrence M. Kahn, 1992. "The Gender Earnings Gap: Some International Evidence," NBER Working Papers 4224, National Bureau of Economic Research, Inc.
  2. S.S. Gustafsson & M. Bruyn-Hundt, 1991. "Incentives for Women to Work: A Comparison between The Netherlands, Sweden and West Germany," Journal of Economic Studies, Emerald Group Publishing, vol. 18(5/6), pages 30-65, October.
  3. Louis S. Jacobson & Robert J. LaLonde & Daniel Sullivan, 1992. "Earnings Losses of Displaced Workers," Upjohn Working Papers and Journal Articles 92-11, W.E. Upjohn Institute for Employment Research.
  4. Dustmann, Christian & Meghir, Costas, 1999. "Wages, Experience and Seniority," CEPR Discussion Papers 2077, C.E.P.R. Discussion Papers.
  5. 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.
  6. Datta Gupta, Nabanita & Smith, Nina, 2002. "Children and Career Interruptions: The Family Gap in Denmark," Economica, London School of Economics and Political Science, vol. 69(276), pages 609-29, November.
  7. Joshi, Heather & Paci, Pierella & Waldfogel, Jane, 1999. "The Wages of Motherhood: Better or Worse?," Cambridge Journal of Economics, Oxford University Press, vol. 23(5), pages 543-64, September.
  8. Heckman, James J & Walker, James R, 1990. "The Relationship between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data," Econometrica, Econometric Society, vol. 58(6), pages 1411-41, November.
  9. 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, Canadian Economics Association, vol. 34(2), pages 411-429, May.
  10. Albrecht, J & Edin, P-A & Sundstrom, M & Vroman, S-B, 1996. "Career Interruptions and Subsequent Earning : A Reexamination Using Swedish Data," Papers 1996-23, Uppsala - Working Paper Series.
  11. Joni Hersch & Leslie S. Stratton, 1997. "Housework, Fixed Effects, and Wages of Married Workers," Journal of Human Resources, University of Wisconsin Press, vol. 32(2), pages 285-307.
  12. Lundberg, Shelly & Rose, Elaina, 2000. "Parenthood and the earnings of married men and women," Labour Economics, Elsevier, vol. 7(6), pages 689-710, November.
  13. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  14. Moffitt, Robert, 1984. "Profiles of Fertility, Labour Supply and Wages of Married Women: A Complete Life-Cycle Model," Review of Economic Studies, Wiley Blackwell, vol. 51(2), pages 263-78, April.
  15. Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 76-110 National Bureau of Economic Research, Inc.
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