Paternity Leave and the Motherhood Penalty: New Causal Evidence

• Author: Signe Hald Andersen
• DOI: http://doi.org/10.1111/jomf.12507
• Date: 01 October 2018
• Published date: 01 October 2018

S H A Rockwool Foundation Research Unit

Paternity Leave and the Motherhood Penalty:

New Causal Evidence

Objective: The objective of this study was to

test how a father’s paternity leave affects the

within-household gender wage gap among het-

erosexual couples.

Background: Previous studies focus on the

actual number of days of leave the father takes,

but if an important driver of the gender wage gap

is the effect of parental leave on gender-specic

household specialization, absolute variations in

the father’s leave should not be the key inter-

est. Instead, this article tests the effect of the

extent of the father’s leave relative to that of the

mother’s leave because it is this variation that

plausibly affects the division of household labor

and through this the within-household gender

wage gap.

Method: Full sample, administrative data

are from Statistics Denmark. Causal infer-

ence was facilitated by exploiting 5 Danish

parental leave reforms on 5 separate sam-

ples of all households who become rst-time

parents within the year before and after each

refor m (N1=2,304; N2=45,683; N3=16,668;

N4=42,328; N5=38,978).

Rockwool Foundation Research Unit, Sølvgade 10, 2.,

DK-1307 Copenhagen, Denmark (sha@rff.dk).

© 2018 The Authors. Journal of Marriage and Familypub-

lished by WileyPeriodicals, Inc. on behalf of National Coun-

cil on Family Relations.

This is an open access article under the terms of the Creative

Commons Attribution License, which permits use, distribu-

tion and reproduction in any medium, provided the original

work is properly cited.

KeyWords:gender wage gap, instrumental variables models,

paternity leave, reforms.

Results: Father’s leave reduces the within-

household gender wage gap through increasing

mother’s wages. Father’s leave furthermore

causes an increase in total household wage

incomes.

Conclusion: Father’s stronger involvement in

the household may be one route to more gen-

der equality, but more so to increased nancial

well-being among families.

Despite a shrinking gap between men’s and

women’s wages, women in most countries still

earn signicantly less than men. In the United

States and United Kingdom this gap exceeds

17%. Even in countries such as Denmark,

where both the labor market and the welfare

state are organized to promote gender equality,

women still earn 7% less than men (udadjusted

statistics from The Organisation for Economic

Co-operation and Development, see OECD stat,

2013).

The extent of family-friendly policies, includ-

ing the access to leave at childbirth, is one expla-

nation for the existence of the gender wage

gap in most Western countries (Boeckmann,

Misra, & Budig, 2015; Misra, Budig, & Moller,

2007; Petersen, Penner, & Hogsnes, 2010, 2014;

Stier & Mandel, 2009). This interpretation has

spurred an interest in how father’s leave affects

the gender wage gap by possibly affecting both

his own and the mother’s labor marketparticipa-

tion (Budig, Misra, & Boeckmann, 2016; Cools,

Fiva, & Kirkebøen, 2011; Hart, Andersen, &

Drange, 2016; Johansson, 2010; Rege & Solli,

2013). The paternity leave hypothesis is that

a longer leave increases a father’s short- and

Journal of Marriage and Family 80 (October 2018): 1125–1143 1125

DOI:10.1111/jomf.12507

1126 Journal of Marriage and Family

long-term involvement in child care, which in

turn relieves some of the burdens of mother-

hood and enhances the mother’s labor market

participation and wages. Todate, empirical stud-

ies have focused on the effects of the absolute

length of the paternity leave. However, studying

paternal leave in isolation does not provide a true

test of the paternity leave hypothesis because a

father’s leave is likely to have the hypothesized

effect only on the division of labor in the house-

hold when balanced by the mother’s unchanged

or shorter leave. If the mother instead increases

her leave in response to the father’slonger leave,

we can expect his leave to have less of an effect

because the mother will still be comparatively

more involved in the household chores. Thus,

what we need is to test the effect of the father’s

leave relative to the mother’s leave.

For this purpose, this study investigates

how exogenous changes in the leave taken

by fathers relative to mothers in heterosexual

couples affects the mother’s and father’s wage

incomes—and thus, essentially, the gender

wage gap.

B

The literature provides a range of explanations

for the persistent gender wage gap, including

differences in human capital such as schooling

and experience, work hours, gender differences

in choice of occupations, industries and rms,

and differences in discrimination (Mandel &

Semyonov, 2014; Petersen, Snartland, Becken,

& Olsen, 1997). In addition, scholars have more

recently begun to scrutinize the inuences from

gender differences in norms and noncognitive

skills. Although women have largely reached

parity with men regarding human capital, many

of the other explanations may still account for

substantial portions of the gender wage gap

(Blau & Kahn, 2016).

According to the literature, the actual and

expected gender-specic division of labor

affects the gender wage gap and suggests that

women’s responsibilities in child birth and child

care are vital in reducing mother’s wages. This

reduction is the "motherhood penalty," which

has been documented empirically by numerous

studies (Budig & England, 2001) across socioe-

conomic groups (Budig & Hodges, 2010) and

institutional contexts (Aisenbrey, Evertsson,

& Grunow, 2009; Gangl & Ziee, 2009).The

motherhood penalty works through selecting

specic women into motherhood (Gupta &

Smith, 2002), statistical discrimination of

mothers in the labor market (Gupta, Smith, &

Verner, 2008) and the human capital deprecia-

tion caused by time spent away from the labor

market due to leave and the need for reduced or

exible work hours (Kahn, García-Manglano,

& Bianchi, 2014; Lundberg & Rose, 2000; Staff

& Mortimer, 2012).

Furthermore, the literature documents a

"fatherhood premium"; becoming a father

increases wages between 3% and 10% (Kille-

wald, 2012; Lundberg & Rose, 2002). One

explanation for this effect is the expected

increased gender-specic specialization that

(may) result from the childbirth. Through this

specialization the father reduces time spent on

household chores and increases his labor market

specialization, which increases his productivity

and wage gains. Another explanation suggests

that fatherhood leads to prosocial behavior,

which increases his labor market participation

and, through this, his wages (Augustine, Nelson,

& Edin, 2009; Knoester & Eggebeen, 2006).

The existence of the motherhood penalty

and the fatherhood premium makes childbirth

a driver of the gender wage gap. However,

aside from the labor market choices that men

and women make when becoming parents,

the support that society provides for parents

through family-friendly policies may also fur-

ther reinforce the effect of parenthood on the

gender wage gap. For instance, by granting

parents the right to take leave before and after

childbirth and earmarking (signicant) parts of

the leave to mothers and other (smaller) parts

to fathers, the system both promotes mothers’

stronger involvement in child care and fathers’

dedication to (and even importance in) the labor

market (Boeckmann et al., 2015; Misra et al.,

2007; Stier & Mandel, 2009).

Thus, the organization of the parental leave

system, and how it incentivizes fathers to take

leave, affects the gender wage gap, and it may

do so through three mechanisms. First, when

policies allow parents to share a given num-

ber of weeks, a father’s longer leave mechani-

cally reduces mother’s leave, thus reducing the

depreciation of her labor market capital. Sec-

ond, because a father’s leave may increase his

household capital and strengthen his relation-

ship to the children, it increases the probability

that parents share domestic responsibilities after

the leave (as supported by Patnaik, 2015; see