Abstract

The literature shows that gender differences in employment and pay can be explained to an important extent by the negative effect of motherhood on women's labour market careers. One aim of the 2007 parental benefit reform ("Elterngeldreform") was to improve the compatibility of family and career. In a first step, this project estimates the employment and wage effects of the birth of the first child for mothers using a dynamic treatment effects approach. In the second step, the change in maternal selection - i.e. in fertility according to the determinants of labour market success - is estimated. The study thus allows to separate the selection effect of the reform from the effect of the reform on the career costs of mothers. The analysis is performed with a data set that links the insurance accounts sample of the pension insurance with information from the Integrierte Erwerbsbiografien data base.