DP11586 The Career Costs of Children
Author(s): | Jérôme 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: | 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.