The Wage Effects of Entering Motherhood - a Within-Firm Matching Approach

30 Pages Posted: 22 Aug 2006 Last revised: 28 Aug 2008

See all articles by Miriam Beblo

Miriam Beblo

ZEW – Leibniz Centre for European Economic Research

Stefan Bender

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Elke Wolf

Center for European Economic Research (ZEW)

Date Written: 2006

Abstract

We analyze the wage effects of employment breaks of women entering motherhood using a novel within-firm matching approach where mothers' wages upon return to the job are compared with those of their female colleagues within the same firm. Using an administrative German data set we investigate three different matching procedures based on information two years before birth: (1) exact matching on individual characteristics, (2) propensity score matching and (3) a combined procedure of exact and propensity score matching. Our results yield new insights into the nature of the wage penalty associated with motherhood, since we find first births to reduce women's wages by 16 to 19 percent, regardless of the matching procedure applied. Neglecting the firm identifier and matching across all firms, however, yields a wage cut of 30 percent. Furthermore, we can show that the wage loss increases with the duration of the employment break.

Keywords: wages, parental leave, matching

JEL Classification: J13, J31, C14

Suggested Citation

Beblo, Miriam and Bender, Stefan and Wolf, Elke, The Wage Effects of Entering Motherhood - a Within-Firm Matching Approach (2006). ZEW - Centre for European Economic Research Discussion Paper No. 06-053, Available at SSRN: https://ssrn.com/abstract=925618 or http://dx.doi.org/10.2139/ssrn.925618

Miriam Beblo (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Stefan Bender

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany
+49 911 179 3082 (Phone)
+49 911 179 3297 (Fax)

Elke Wolf

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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