The Sorting of Female Careers after First Birth: A Competing Risks Analysis of Maternity Leave Duration
| Author | Stephan Dlugosz,Melanie Arntz,Ralf A. Wilke |
| Published date | 01 October 2017 |
| Date | 01 October 2017 |
| DOI | http://doi.org/10.1111/obes.12158 |
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©2017 The Department of Economics, University of Oxford and JohnWiley & Sons Ltd.
doi: 10.1111/obes.12158
The Sorting of Female Careers after First Birth:
A Competing Risks Analysis of Maternity Leave
Duration*
Melanie Arntz,†,‡Stephan Dlugosz,† and Ralf A. Wilke†,§
†ZEW Mannheim, L7.1 D-68161, Mannheim, Germany (e-mail: arntz@zew.de)
‡University of Heidelberg, Alfred-Weber-Institut f¨ur Wirtschaftswissenschaften, Bergheimer
Straße 58, DE - 69115 Heidelberg, Germany (e-mail: stephan.dlugosz@googlemail.com)
§Department of Economics, Copenhagen Business School, Porcelænshaven 16A DK-2000,
Frederiksberg, Denmark (e-mail: rw.eco@cbs.dk)
Abstract
A number of contributions have found evidence that motherhood is a critical life event
for women’s employment careers. This study presents a detailed analysis for the duration
of maternity leave in which young mothers can make a transition into different types
of employment, unemployment as well as the next birth. We provide a comprehensive
picture of the sorting mechanisms that lead to the differentiation of women’s employment
careers after birth. Our empirical evidence is derived from large-linked administrative
individual labour market data from Germany for a period of three decades. We obtain
unprecedented insights into how women’s skills, the quality of the previous job match,
firm level characteristics, labour market conditions and leave legislation are related to the
length of maternity duration. Expansionary leave policies, e.g. are found to be a key factor
for the rising share of women who have their second child out of inactivity.
I. Introduction
The transition to motherhood can be considered a critical life event for women’s subsequent
employment careers. However, prior to the first birth, a high and increasing share of women
are working full time, there appears to be a strong differentiation of career paths afterwards
with many womenretur ning onlypar t-time or not returning at all (Angrist and Evans, 1998;
Lundberg and Rose, 2000; Gjerdingen and Center, 2005; Baxter, Hewitt and Haynes,2008;
Fitzenberger, Sommerfeld and Steffes, 2013; Schober, 2013). In fact, Gustafsson et al.
(1996) find that differences in female labour force participation across Sweden, Germany
and Great Britain are solely due to postbirth differences. In Germany, the impact of first
birth on women’ssubsequent careers appears to be stronger than in other European countries
JEL Classification numbers: C41, J13, J18.
*Wethank Conny Wunsch and the participants at various seminars and conferences for their feedback on this work.
Wealso thank the research data centre at the Institute for Employment Research for the support with the data. Financial
support from the German Research Foundation (DFG) through the grant FI692/9-2 is gratefully acknowledged.
OXFORD BULLETIN OF ECONOMICSAND STATISTICS, 79, 5 (2017) 0305–9049
690 Bulletin
as shown by Gutierrez-Domenech (2005).Among those employed 1 year before birth, only
around 50 percent are working 5 years after birth compared to two-thirds in most other
countries. Moreover, this share of working mothers is only few percentage points higher
than 2 years after birth.
In addition, there are numerous studies suggesting persistent wage losses from mother-
hood that seem to be largely driven bybir th-related work interruptions and the subsequent
return to reduced working hours (Waldfogel, 1997; Budig and England, 2001; Phipps, Bur-
ton and Lethbridge, 2001; Baum, 2002; Gangl and Ziefle, 2009; Viitanen,2012). Moreover,
these wage penalties appear to be quite pronounced for Germany (Sch¨onbergand Ludsteck,
2007; Beblo, Bender and Wolf, 2009). Hence, birth-related career interruptions appear to
be an important determinant of the family and gender wage gap as has already been sug-
gested by Mincer and Polachek (1974). However,some studies suggest that at least par ts of
the wage penalty do not seem to have a causal nature, but are driven by the selection pro-
cesses surrounding birth. While controlling for unobservable differences between women
with and without children does not substantially reduce the wage penalty for most studies,1
Winder (2008) suggests that the wage penalty for the US disappears when taking acount
of the negative selection of women into birth with respect to their prebirth wage growth.
Apparently, women with a poor labour market performance have higher subsequent fertil-
ity rates, hence biasing the wage penalty upward. Ejrnæs and Kunze (2013), on the other
hand, demonstrate that the wage penalty in Germany is upward biased due to a selection of
less productive women into postbirth employment. They hence argue that the rather high
wage penalties for women with small children whohave been found in Germany are biased
by conditioning on a sample of women that returned to work.They hence propose to have
a closer look at the selection processes that are taking place after birth.
In fact, even among women who give birth to their first child and have all been working
full time prior to birth, the related work interruption leads to a strong differentiation of
subsequent labour market paths as suggested by Figure 1.2The figure showsthe propor tion
of German women who end their birth-related work interruption by either returning to their
previous job in full time or part-time, by taking up a job with another employer, delivering
another child or starting a period of unemployment, education or training. In addition to
suggesting a strong differentiation of women’s labour market paths after birth, the figure
also indicates that there have been notable changes across the observation period between
1980 and 2000 such as an strong increase in the incidence of giving birth to the second child
out of leave-related inactivity. This rasies the question as to whatdrives this differentiation
process. The answer to this question is of high concern for mothers, employers and the
economy as a whole. For employers, work interruptions, especially by women with long
tenure and good job performances, are costly because firm-specific human capital may
get lost and can be substituted for only by a costly hiring and training process of new
employees (Alewell and Pull, 2001). Moreover, a fast return to the predelivery employer
has been found to reduce the wage loss from motherhood (Waldfogel, 1997; Phipps et al.,
2001; Baum, 2002; Ziefle, 2004) which is desirable both from the perspective of mothers
1As an exception,Anderson, Binder and Krause (2003) find strongly reduced and Korenman and Neumark (1992)
even insignificant wage penalties from motherhood once controlling for unobserved heterogeneity within a fixed
effects framework.
2For details on the data source and definition see section III.
©2017 The Department of Economics, University of Oxford and JohnWiley & Sons Ltd
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