Does Endogenous Matching Explain the Family Pay Gap? Evidence from Linked Employer-Employee Data

Once individual unobserved heterogeneity and human capital depreci- ation have proved not to fully account for wage di erences consecutive to parenthood, a remaining explanation (discrimination aside) could be that parents select into low wage rms. This paper tests that hypothesis by resorting to linked employer-employee data and by introducing rm xed e ects in hourly wage equations, on top of worker xed e ects and usual measures of human capital. A motherhood penalty remains despite the presence of two-way high dimensional xed e ects. By contrast, men do not experience any loss due to childbirth, but they do not enjoy any premium either.