The Labor Cost of Motherhood and the Length of Career Break Around Childbirth

Enrica Maria Martino, CHILD - Collegio Carlo Alberto

The aim of this paper is to analyze the effect of career breaks around childbirth on maternal labor market outcomes and the role of parental leave policies in affecting maternal labor supply. I have access to administrative data providing information on the universe of dependent workers in the private sector, and the universe of demands for maternity and parental leave. I study the impact of childbirth on maternal earnings and labor supply at the extensive and intensive margin using an event study approach on the universe of women working as employees in the private sector. Moreover, I exploit the introduction of a childcare subsidy conditional on early return to work as a quasi-experimental setting that allows estimation of the causal impact of shorter career break around childbirth on maternal labor market performance (earnings, labor supply at the extensive and intensive margins, wage, career path) in the short and medium run. Preliminary results show that women experience more than 35% loss in earnings after the birth of a child, mostly driven by a reduction in labor supply, and the loss is persistent up to three years after maternity leave. The shorter leave induced by the introduction of conditional childcare subsidy increases maternal earnings only in the very short run.

Presented in Session 1144: Economics, Human Capital, and Labour Markets