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Oxford Economic Papers Advance Access originally published online on December 11, 2008
Oxford Economic Papers 2009 61(Supplement 1):i11-i34; doi:10.1093/oep/gpn040
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© Oxford University Press 2008 All rights reserved

This article appears in the following Oxford Economic Papers issue: Special Issue: WOMEN AND WAGES [View the issue table of contents]

Establishment-level wage effects of entering motherhood

Miriam Beblo*, Stefan Bender{dagger}, and Elke Wolf{ddagger}

*Berlin School of Economics, Badensche Strasse 50–51, D-10825 Berlin; e-mail: beblo{at}fhw-berlin.de
{dagger}Institute for Employment Research, Regensburger Straße 104, D-90478 Nuremberg; e-mail: stefan.bender{at}iab.de
{ddagger}University of Applied Sciences Munich, Lothstr. 64, D-80335 Munich; e-mail: elke.wolf{at}hm.edu

JEL classifications: J13, J31, C14


  Abstract

We analyse the wage effects following employment breaks of women who enter motherhood using a novel matching approach where mothers’ wages upon return to work are compared to those of their female colleagues within the same establishment. Using an administrative German data set, we apply a fixed-effects propensity score matching based on information two years before birth of the first child. Our results yield new insights into the nature of the wage penalty associated with motherhood: when matching with establishment-specific effects we find that first births reduce women's wages by 19%, whereas ignoring the identifier and matching across all establishments would yield a wage cut of 26%. We therefore conclude that selection into establishments is an important explanatory factor for the family pay gap.


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