Research

Work in Progress

Child Penalty Estimation and Mothers' Age at First Birth

Abstract

Motherhood continues to pose significant challenges to women’s careers, and a correct assessment of its effects is crucial for understanding the persistent gender inequality in the labor market. We show that the prevalent approach to estimate post-birth earnings losses – so called “child penalties” – is prone to yield substantially biased results. We demonstrate that the biases stem from conventional event studies pooling together first-time mothers of all ages, without considering their distinct characteristics and the varying impact of motherhood. To address the biases, we propose a novel approach that accounts for the heterogeneity by building upon recent advancements in the econometric literature on difference-in-differences models. Applying it to administrative data from Germany, we demonstrate that considering heterogeneity by maternal age at birth is crucial for both methodological correctness and a deeper understanding of gender inequality. Our approach yields substantially larger estimates of earnings losses after childbirth (by 20 percent), indicating that the costs of motherhood and related gender gaps in Germany are even larger than previously thought. Moreover, we demonstrate that effects and their interpretation differ significantly depending on maternal age at birth. We show that younger first-time mothers experience larger career costs of motherhood, as they miss out on the phase of the most rapid career progression.

Wage Inequality Consequences of Expanding Public Childcare

Discussion Paper

Abstract

Family policies are important in shaping the labor supply of women. Hence, for the female part of the population, they play a role as labor market institutions. While the impact of such institutions as unions or minimum wages on wage inequality has extensively been studied, family policies and their effect on inequality have received much less attention. This paper, therefore, assesses the impact of a large expansion of public childcare in Germany on wage inequality. Exploiting regional variation in childcare supply, I show that in regions with stronger increases in childcare wage inequality among women increased less strongly compared to regions with smaller increases. This is primarily driven by the lower half of the wage distribution and qualitatively similar for both full- and part-time workers. Larger expansions in childcare, however, do not contribute to a further closing of the gender wage gap, suggesting they are associated with a more negative selection of women into the workforce.

Unpacking Parental Leave: The Role of Job Protection

with Sebastian Findeisen, Jörg Heining and Sebastian Siegloch

Contact me for slides

Abstract

Parental leave is one of the most important policies that shape the post-birth careers of women. We exploit a sequence of parental leave reforms in Germany that extended both the job protection period and the duration of parental leave benefits to different extents to study the effects of the two policy instruments parental leave consists of. Using administrative social security data, we first replicate the stylized facts that mothers respond to extensions in parental leave and that the average effect of longer leave-taking on their careers is negative. In a second step, we analyze the causal effects of job protection and parental benefit payments. Holding constant the length of mothers' post-birth labor market break, we show that extending job protection significantly reduces losses in long-run earnings while extensions of the benefit duration have no measurable impact. The positive effect of employment protection works both by enhancing employer continuity as well as by improving outside opportunities for mothers who change their employer.

Published

Government Consumption in the DINA Framework: Allocation Methods and Consequences

with Holger Stichnoth, International Tax and Public Finance, 2024, 31(3), 736–779.

Paper Journal Website

Abstract

About half of government expenditure in the United States takes the form of government consumption (e.g., education, defense, infrastructure). In many studies of post-tax inequality based on the DINA framework (including the influential study by Piketty, Saez, and Zucman 2018), government consumption is allocated either proportionally to post-tax disposable income or on a per-capita basis, and the level of inequality is fairly sensitive to this choice. This paper provides direct evidence on how public education spending (a substantial part of government consumption) is actually distributed. An allocation proportional to post-tax disposable income is clearly rejected, while a lump-sum allocation is found to provide a good approximation.