Work and wage dynamics around childbirth

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 identi cation. On their return to work after childbirth, mothers' wages drop by 3 to 5.7 per cent per year of leave. We fi nd negative selection back to full-time work after childbirth. We discuss policy implications regarding statistical discrimination and results concerning the family gap.