Child Care Provision and Women's Careers in Firms

61 Pages Posted: 31 Mar 2017 Last revised: 26 Oct 2017

See all articles by Vidhi Chhaochharia

Vidhi Chhaochharia

University of Miami - Department of Finance

Suman Ghosh

Florida Atlantic University - Department of Economics

Alexandra Niessen-Ruenzi

University of Mannheim - Department of Finance

Christoph Schneider

Tilburg University - Department of Finance

Date Written: October 25, 2017

Abstract

This paper investigates the impact of government provided child care on women's careers. Using a unique employer-employee matched dataset from Germany and persistent county level differences in government provided child care between East and West Germany, we find that women and particularly mothers earn higher salaries if child care provision is high. In addition, they are more likely to experience large positive wage changes. Results are accentuated for high female wage earners, women with higher education, and mothers with many and small children. The positive impact of child care provision on women's careers results in a larger pool of qualified women firms can draw from. In line with this view, we show that the negative stock market reaction to mandated gender quotas that has been posited in the literature is mitigated for firms located in regions with high government provided child care.

Keywords: child care, female wages

JEL Classification: J3, J7

Suggested Citation

Chhaochharia, Vidhi and Ghosh, Suman and Niessen-Ruenzi, Alexandra and Schneider, Christoph, Child Care Provision and Women's Careers in Firms (October 25, 2017). Available at SSRN: https://ssrn.com/abstract=2943427 or http://dx.doi.org/10.2139/ssrn.2943427

Vidhi Chhaochharia (Contact Author)

University of Miami - Department of Finance ( email )

P.O. Box 248094
Coral Gables, FL 33124-6552
United States

Suman Ghosh

Florida Atlantic University - Department of Economics ( email )

5353 Parkside Dr
Jupiter, FL 33458
United States

Alexandra Niessen-Ruenzi

University of Mannheim - Department of Finance ( email )

Mannheim, 68131
Germany

Christoph Schneider

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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