New Evidence on the Motherhood Wage Gap

30 Pages Posted: 27 Aug 2008

See all articles by Catalina Amuedo-Dorantes

Catalina Amuedo-Dorantes

San Diego State University - Department of Economics; IZA Institute of Labor Economics

Jean Kimmel

Western Michigan University - Department of Economics; IZA Institute of Labor Economics

Abstract

Using data from the 1979 National Longitudinal Survey of Youth, we assess the role of employment-based health insurance offers in explaining the motherhood wage gap. Researchers have been aware of the existence of a motherhood gap for many years; yet, the literature has failed to address the role of non-wage compensation in explaining the motherhood wage gap despite the increasing importance of non-wage benefits in total compensation packages. As hedonic wage theory suggests, mothers might view health benefits as desirable and trade-off wages for health insurance. Thus, lower wages for mothers might reflect their relative preferences for jobs offering health insurance. We estimate an endogenous switching wage equation model to account for the self-selection and, thus, endogeneity of having an employment-based health insurance offer. We find that, once the endogeneity of having an employment-based health insurance offer is accounted for, the motherhood wage gap disappears.

Keywords: motherhood wage gap, non-wage compensation, health insurance

JEL Classification: J01, J31, J33, J16

Suggested Citation

Amuedo-Dorantes, Catalina and Kimmel, Jean, New Evidence on the Motherhood Wage Gap. IZA Discussion Paper No. 3662. Available at SSRN: https://ssrn.com/abstract=1251030 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Catalina Amuedo-Dorantes (Contact Author)

San Diego State University - Department of Economics ( email )

5500 Campanile Drive
San Diego, CA 92182
United States
619-594-1663 (Phone)
619-594-5062 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jean Kimmel

Western Michigan University - Department of Economics ( email )

Kalamazoo, MI 49008
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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