Public Child Care Provision and the Motherhood Penalty
76 Pages Posted: 31 Mar 2017 Last revised: 2 Mar 2021
Date Written: March 2, 2021
We investigate the impact of government-provided child care on the `motherhood penalty'. Using a unique employer-employee matched data set from Germany, we find that mothers in low child care counties experience a 25% larger earnings penalty than mothers in high child care counties. This penalty is observable immediately after women give birth to their first child, and it comes from three margins: fewer days worked (32%), switching to a part-time position (11%), and mothers leaving the workforce (26%). In addition, mothers in high child care counties are more likely to be promoted. We exploit a public child care reform in Germany to establish causality.
Keywords: Child care, Motherhood penalty, Gender pay gap
JEL Classification: J3, J7
Suggested Citation: Suggested Citation