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The Effect of Maternity Leave on Women's Pay in Germany 1984-1994

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  • Jan Ondrich
  • Katharina C. Spieß
  • Qing Yang

Abstract

In 1986 German federal parental leave and benefit policy was expanded in several ways, extending the potential duration of leave from six to ten months and paying child-rearing benefits to all new mothers regardless of their employment status before childbirth. The potential duration has increased four times since 1986 and stood at 18 months in 1991 and three years starting in 1992. This study uses log-wage difference regressions to examine the effect of leave taken by the mother on wage growth for two 5-year periods, 1984-1989 and 1989-1994. In each of the fiveyear periods, taking maternity leave was found to have a significant negative effect on wage growth. Point estimates imply that each month of maternity leave reduced wage growth by 1.5 percent over five years. In addition, for the second five-year period only, mothers experienced lower wage growth if they chose to stay at home rather than return to work when the allowable leave period expired: from 1989 to 1994, a half-year out of the labor force after the end of the leave period lowered wage growth by an additional 15 percent over five years.

Suggested Citation

  • Jan Ondrich & Katharina C. Spieß & Qing Yang, 2002. "The Effect of Maternity Leave on Women's Pay in Germany 1984-1994," Discussion Papers of DIW Berlin 289, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp289
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    Cited by:

    1. Olivier Thévenon & Angela Luci, 2012. "Reconciling Work, Family and Child Outcomes: What Implications for Family Support Policies?," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 31(6), pages 855-882, December.
    2. Fabel, Marc, 2021. "Maternity leave and children's health outcomes in the long-term," Journal of Health Economics, Elsevier, vol. 76(C).
    3. Beatrice Scheubel, 2014. "Does It Pay to Be a Woman?: Labour Demand Effects of Maternity-Related Job Protection and Replacement Incomes," SOEPpapers on Multidisciplinary Panel Data Research 685, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Jane Waldfogel, 1999. "The impact of the family and medical leave act," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(2), pages 281-302.
    5. Jane Waldfogel, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-156, Winter.
    6. repec:cge:wacage:519 is not listed on IDEAS
    7. Laurent Lequien, 2012. "Parental Leave Duration and Wages: A Structural Approach," Working Papers 2012-04, Center for Research in Economics and Statistics.
    8. Görlich, Dennis & De Grip, Andries, 2007. "Human capital depreciation during family-related career interruptions in male and female occupations," Kiel Working Papers 1379, Kiel Institute for the World Economy (IfW Kiel).
    9. Ann-Christin Bächmann & Dörthe Gatermann, 2017. "The duration of family-related employment interruptions – the role of occupational characteristics [Die Bedeutung des Berufs für die Dauer von Erwerbsunterbrechungen nach der Geburt des ersten Kind," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 50(1), pages 143-160, August.
    10. Yusuf Emre Akgunduz & Janneke Plantenga, 2013. "Labour market effects of parental leave in Europe," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(4), pages 845-862.
    11. Troeger, Vera E. & Di Leo, Riccardo & Scotto, Thomas J. & Epifanio, Mariaelisa, 2020. "The Motherhood Penalties : Insights from Women in UK Academia," The Warwick Economics Research Paper Series (TWERPS) 1313, University of Warwick, Department of Economics.

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