Employment Decisions of European Women After Childbirth

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Employment Decisions of European Women After
Childbirth

• Chiara Pronzato (ISER)
• EPUNet Conference, May 9th 2006

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Aims

• What do women do after childbirth?
• How long do they take to start working?
• Which characteristics of the woman, the household
  and the environment make more likely the decision
  to work after the childbirth?
• How does the social environment (childcare and
  parental leave arrangements) affect mothers
  participation behaviour?

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Motivations

• Development of human capital financial
  independence
• Higher female participation (and fertility) to
  maintain the welfare system (EU objective)

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Outline

• Estimation of the determinants of post-birth
  employment, separately for each country
• Simulation of a NEW sample for each country, by
  using its own estimated parameters and statistics
• Introduction of the characteristics of the
  environment in a dataset which comprises all NEW
  samples

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Post-birth employmentThe methodological
framework

• Maximization of household lifetime utility
• at any moment, she decides to participate in the
  labour market if
• offered wage gt reservation wage
• her productivity her productivity at home
  in the labour market
  (number and ages of her (human
  capital) children)

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Post-birth employmentThe methodological
framework

• when time passes by
• the probability to be employed is decreased by
  the loss in human capital which affects her
  potential wage
• and increased by the loss in her productivity at
  home (due to childs age) which impacts on her
  reservation wage

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Post-birth employmentThe methodological
framework

• X womans characteristics
• H households characteristics
• E economic environment
• J time elapsed from the childbirth

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Sample selection
European Community Household Panel (ECHP)
Work? Yes
Work? No
Work? No
childbirth
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Samples
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Variables in the model

• X womans potential wage
• H household income (social transfers, private
  income, male/grandparents earnings)
• lone mother/ extended family
• first childbirth, other kids born along the spell
• E regional unemployment rate (REGIO)
• t time elapsed from the childbirth (T-1)

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Variables in the model

Work? Yes
Work? No
Work? No
childbirth First childbirth? Potential wage
Time elapsed from the childbirth Lone mother?
Extended family? Other kids? Household income
Unemployment rate
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Post-birth employmentResults

• Positive effect of
• the potential wage
• the extended family (ES, EL, LU)
• the first childbirth compared to the subsequent
  ones
• the time from the childbirth (GE, DK, UK, FI)
• Negative effect of
• the household income
• being a lone mother (NL, BE, UK, PT)
• other kids born during the spell
• regional unemployment
• the time from the childbirth (NL, BE, LU, IT)

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Post-birth fertilityDescriptive Statistics
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Simulation of NEW samples

• According to the country specific estimated
  parameters, we simulate the probability to be
  still inactive for a group of women, given the
  possible combinations of these characteristics
• Potential wage (3 levels)
• Child aged between 0 and 3
• Family structure (3 possibilities)
• Household income (3 levels)
• First childbirth (2 possibilities)
• Other kids (2 possibilities)
• Unemployment rate (2 levels)

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Maternity and parental leaves in Europe
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Childcare services in Europe
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Characteristics of the Environment
Child 0-2 Child 3
Leave (low educ) 0.240 - 0.069
Leave (medium) 0.127 - 0.085
Leave (high) 0.045 - 0.175
Childcare - 0.077 - 0.090
North 0.135 - 0.984
South - 0.106 - 0.457
Constant 0.296 2.116
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Cross-country comparison
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Summary

• Amount of time that mothers take to return to
  work heterogeneity among countries
• Most of the difference in post birth
  participation in Europe is due to differences in
  labour market participation among less educated
  women
• Stronger effect of womans human capital in South
  Europe
• Women in countries with long parental leave tend
  to take advantage of it delaying their return
  (not highly educated ones)
• Women in countries with high availability of
  childcare services tend to start working sooner
• When the child is 3, these environmental
  characteristics do not seem to affect mothers
  labour market participation anymore