Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 4/2012: Work and Wage Dynamics around Childbirth.

Mette Ejrnæs () and Astrid Kunze ()
Additional contact information
Mette Ejrnæs: University of Copenhagen, Postal: Department of Economics, University of Copenhagen, Copenhagen, Denmark
Astrid Kunze: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway

Abstract: This study investigates how the first childbirth affects the wage processes of women who are well-established in the labour market. We estimate a flexible …fixed-effects wage regression model extended by post-childbirth…fixed effects. We use register data on West Germany and exploit the expansionary family policy during the late 1980s and 1990s for identification. On their return to work after childbirth, mothers’wages drop by 3 to 5.7 per cent per year of leave. We find negative selection back to full-time work after childbirth. We discuss policy implications regarding statistical discrimination and results concerning the family gap.

Keywords: Wages; parental leave; human capital; control function.

JEL-codes: C23; J24; J31

32 pages, February 29, 2012

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