Work and Wage Dynamics Around Childbirth

This study investigates how the first childbirth affects the wage processes of women who are well-established in the labour market. We estimate a flexible fixed-effects wage regression model extended by post-childbirth fixed effects. We use register data on West Germany and exploit the expansionary family policy during the late 1980s and 1990s for identification. On their return to work after childbirth, mothers wages drop by 3 to 5.7 percent per year of leave. We find negative selection back to full-time work after childbirth. We discuss policy implications regarding statistical discrimination and results concerning the family gap