Public Child Care Provision and Women's Career Choices

69 Pages Posted: 31 Mar 2017 Last revised: 23 Oct 2022

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; University of Mannheim - Department of Finance

Christoph Schneider

University of Münster - Finance Center Münster

Date Written: March 2, 2021

Abstract

This paper studies the impact of child care provision on the child penalty and on women’s career choices. We show that new mothers in high child care counties in Germany experience a 25% smaller earnings penalty than new mothers in low child care counties. This difference comes from three margins: mothers in high child care counties work more days (32%), are less likely to switch to a part-time position (11%), and less likely to leave the workforce completely (26%). Results are stronger for highly educated women. Women in high child care areas are more likely to be promoted to managerial positions and higher levels in the job ladder. There are more female managers in high child care counties and stock returns of firms in these counties react less negatively to the announcement of a mandatory board gender quota.

Keywords: Child care, Motherhood penalty, Gender pay gap

JEL Classification: J3, J7

Suggested Citation

Chhaochharia, Vidhi and Ghosh, Suman and Niessen-Ruenzi, Alexandra and Niessen-Ruenzi, Alexandra and Schneider, Christoph, Public Child Care Provision and Women's Career Choices (March 2, 2021). 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

University of Mannheim, Department of Finance ( email )

L9, 1-2
Mannheim, 68131
Germany
+49 621 181 1595 (Phone)

Christoph Schneider

University of Münster - Finance Center Münster ( email )

Universitätsstraße 14-16
Münster, 48143
Germany

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