DP11586 The Career Costs of Children
|Author(s):||Jerome Adda, Christian Dustmann, Katrien Stevens|
|Publication Date:||October 2016|
|Keyword(s):||dynamic structural model, Fertility, gender wage gap, Labor Supply, occupation|
|JEL(s):||C15, C33, J13, J22, J24, J31|
|Programme Areas:||Labour Economics|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11586|
We estimate a dynamic life-cycle model of labor supply, fertility and savings, incorporating occupational choices, with specific wage paths and skill atrophy that vary over the career. This allows us to understand the trade-o between occupational choice and desired fertility, as well as the sorting both into the labor market and across occupations. We quantify the life-cycle career costs associated with children, how they decompose into loss of skills during interruptions, lost earnings opportunities and selection into more child-friendly occupations. We analyze the long-run effects of policies that encourage fertility and show that they are considerably smaller than short-run effects.