Public Child Care Provision and the Motherhood Penalty

76 Pages Posted: 31 Mar 2017 Last revised: 2 Mar 2021

See all articles by Vidhi Chhaochharia

Vidhi Chhaochharia

University of Miami - Department of Finance

Suman Ghosh

Florida Atlantic University - Department of Economics

Alexandra Niessen-Ruenzi

University of Mannheim - Department of Finance

Christoph Schneider

Universität Münster

Date Written: March 2, 2021

Abstract

We investigate the impact of government-provided child care on the `motherhood penalty'. Using a unique employer-employee matched data set from Germany, we find that mothers in low child care counties experience a 25% larger earnings penalty than mothers in high child care counties. This penalty is observable immediately after women give birth to their first child, and it comes from three margins: fewer days worked (32%), switching to a part-time position (11%), and mothers leaving the workforce (26%). In addition, mothers in high child care counties are more likely to be promoted. We exploit a public child care reform in Germany to establish causality.

Keywords: Child care, Motherhood penalty, Gender pay gap

JEL Classification: J3, J7

Suggested Citation

Chhaochharia, Vidhi and Ghosh, Suman and Niessen-Ruenzi, Alexandra and Schneider, Christoph, Public Child Care Provision and the Motherhood Penalty (March 2, 2021). Available at SSRN: https://ssrn.com/abstract=2943427 or http://dx.doi.org/10.2139/ssrn.2943427

Vidhi Chhaochharia (Contact Author)

University of Miami - Department of Finance ( email )

P.O. Box 248094
Coral Gables, FL 33124-6552
United States

Suman Ghosh

Florida Atlantic University - Department of Economics ( email )

5353 Parkside Dr
Jupiter, FL 33458
United States

Alexandra Niessen-Ruenzi

University of Mannheim - Department of Finance ( email )

Mannheim, 68131
Germany

Christoph Schneider

Universität Münster ( email )

Universitätsstraße 14-16
Münster, 48143
Germany
+492518322088 (Phone)

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