Leaving the Career behind? Long-Term Wage Consequences of Fathers’ Parental Leave Use in Germany

Corinna Frodermann, Institute for Employment Research
Ann-Christin Bächmann, Institute for Employment Research
Andreas Filser , Institute for Employment Research (IAB)

The transition to parenthood is a critical juncture for gender inequalities in the labor market as heterosexual couples tend to reorganize paid and unpaid work in traditional ways after a child is born. Therefore, increasing fathers’ involvement in childcare is widely seen as a key policy measure to reduce gender inequalities. In Germany, a central parental leave reform in 2007 created incentives for fathers to participate more in childcare by introducing a two-month daddy quota. However, in 2018, more than half of fathers still did not claim any parental allowance. Surveys identified the fear of career disadvantages as a central reason for the reluctance to take paternal leave. However, evidence on the career consequences of paternal leave is still lacking for Germany. In our paper, we address this research gap by examining the long-term wage consequences of fathers’ parental leave. We use a unique administrative dataset from the Integrated Employment Biographies that contains complete employment histories of married couples through 2019, including highly reliable wage information. Our sample covers almost 160,000 couples who became parents between 2007 and 2013. Extensive and daily information on the employment biographies of both partners allows us to analyze parental leave patterns within the couple in detail. We employ an event study design to explore fathers’ wage development before and after taking parental leave and simultaneously consider a control group of men who became fathers but did not take parental leave.

See extended abstract

 Presented in Session 111. Labour Markets and Couples