The Employment of Mothers: Recent Developments and their Determinants in East and West Germany

We apply German Mikrozensus data for the period 1996 to 2004 to investigate the employment status of mothers. Specifically, we ask whether there are behavioral differences between mothers in East and West Germany, whether these differences disappear over time, and whether there are differences in the developments for high vs. low and medium skilled females. We find substantial differences in the employment behavior of East and West German mothers. German family policy sets incentives particularly for low income mothers not to return to the labor market after birth. East German mothers' employment outcomes matches that expected based on these policy incentives: over time East German mothers with low earnings potentials appear to adopt West German low employment patterns.