Discussion Paper Details

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Title: The Career Costs of Children

Author(s): Jérôme Adda, Christian Dustmann and Katrien Stevens

Publication Date: October 2016

Keyword(s): dynamic structural model, Fertility, gender wage gap, Labor Supply and occupation

Programme Area(s): Labour Economics

Abstract: 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.

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Bibliographic Reference

Adda, J, Dustmann, C and Stevens, K. 2016. 'The Career Costs of Children'. London, Centre for Economic Policy Research.