Abstract
Women in the Netherlands face an earnings penalty of 47% after the birth of their first child, which is in line with previous studies. We construct several measures of relative within-household earnings potential to assess the importance of household specialization based on comparative advantage. The Netherlands offers a particularly interesting setting for studying household specialization since employees basically face no restrictions if they want to reduce their working hours. We find that women with a higher earnings capacity than their partner face lower earnings losses after childbirth and reduce their labor supply less than women with a low relative earnings potential. Yet, men's labor market trajectories are largely unaffected by parenthood irrespective of their relative earnings potential in the household. There is thus no evidence that households divide market work and child care based on comparative advantage or bargaining power. We provide some evidence that women with high earnings potential rely more on formal child care.
Original language | English |
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Article number | 102221 |
Pages (from-to) | 1-13 |
Number of pages | 13 |
Journal | Labour Economics |
Volume | 78 |
Early online date | 4 Jul 2022 |
DOIs | |
Publication status | Published - Oct 2022 |
Bibliographical note
Funding Information:We gratefully acknowledge comments from three anonymous referees and from conference and workshop participants at EALE 2021, COMPIE 2021 and in Trier. The non-public micro data used in this paper are available via remote access to the Microdata services of Statistics Netherlands (CBS). Van der Klaauw acknowledges financial support from a Vici-grant from the Dutch Science Foundation (NWO, grant no. 453-15-003).
Publisher Copyright:
© 2022 Elsevier B.V.
Keywords
- Child penalty
- Earnings potential
- Event study
- Gender wage gap
- Household specialization
- Labor supply