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Wage dips and drops around first birth

Kunze, Astrid; Ejrnæs, Mette
Working paper
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URI
http://hdl.handle.net/11250/162868
Date
2004-01
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  • Discussion papers (SAM) [579]
Abstract
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.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2004:3

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