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Oxford Economic Papers Advance Access originally published online on November 21, 2008
Oxford Economic Papers 2009 61(Supplement 1):i35-i55; doi:10.1093/oep/gpn042
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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]

Panel estimates of the wage penalty for maternal leave

Bianca Buligescu*, Denis de Crombrugghe{dagger}, Gülçin Mentesoglu{dagger}, and Raymond Montizaan{ddagger}

*Maastricht Graduate School of Governance, Maastricht University
{dagger}Faculty of Economics and Business Administration, Maastricht University
{ddagger}Research Centre for Education and the Labour Market, Maastricht University, P.O. Box 616, NL 6200 MD Maastricht; e-mail: r.montizaan{at}roa.unimaas.nl

JEL classifications: J31, J24, C23, C24


  Abstract

The focus of this paper is the size of the wage penalty due to maternal leave incurred by working mothers in Germany. Existing estimates suggest large penalties with little rebound over time. We apply recent panel data methods designed to address problems of sample selectivity, unobserved heterogeneity and endogeneity to German Socio-Economic Panel (GSOEP) data. Heckman's classic treatment of selectivity is extended to deal with both heterogeneity and simultaneity. In order to exploit the actual working hours data available in GSOEP, we develop the case of a censored tobit participation model. We also investigate the sensitivity of the results to the choice of method. Our estimates imply a maternal leave wage penalty of 10 to 14% which is less persistent over time than other studies suggest. Five years after the return to work maternal wages have caught up.


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