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International Differences in the Family Gap in Pay: the Role of Labor Market Institutions

  • Dupuy Arnaud
  • Fernandéz-Kranz Daniel

    (ROA rm)

Using microdata for 35 countries over the period 1985-1994-2002 we find thatlabor market institutions traditionally associated to more compressed wagestructures are associated to a higher family gap. Our results indicate that thesepolicies reduce the price effect of having children but aggravate the humancapital loss due to motherhood. We also find evidence that policies that helpwomen continue in the same job after childbirth decrease the family gap. Of allthe countries we study, mothers in Southern Europe suffer the biggest familygap and our analysis indicates that this is due to the bad combination of labormarket policies in these countries. Our results are robust to specificationchanges and indicate that the main reason mothers lag behind other women interms of earnings is the loss of accumulated job market experience caused bycareer breaks around childbirth.

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Paper provided by Maastricht University, Research Centre for Education and the Labour Market (ROA) in its series ROA Research Memorandum with number 005.

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Date of creation: 2007
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Handle: RePEc:unm:umaror:2007005
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  16. Andrés Erosa & Luisa Fuster & Diego Restuccia, 2002. "Fertility Decisions and Gender Differences in Labor Turnover, Employment, and Wages," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 856-891, October.
  17. Waldfogel, Jane, 1995. "The Price of Motherhood: Family Status and Women's Pay in a Young British Cohort," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 584-610, October.
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