Changing Fertility and Heterogeneous Motherhood Effects

Using a semiparametric event study approach with a control group, the paper presented in this Mannheim Applied Seminar estimates the effect of motherhood on labor market outcomes in Germany, the child penalty. They further investigate how the 2007 parental benefits reform changed the child penalty while accounting for fertility effects. A large novel data set linking data from two administrative sources provides information on all births. Their estimation approach accounts for motherhood being a staggered treatment. The reform has small positive medium-run effects employment outcomes. It changes the selection into fertility and has certain heterogeneous effects. However, the reform did little to reduce the average child penalty.