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Employment Decisions
of European Women After Childbirth
Chiara Pronzato (ISER)
EPUNet Conference, May 9th 2006
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?
Motivations
Development of human capital – financial
independence
Higher female participation (and fertility) to maintain
the welfare system (EU objective)
Outline
1) Estimation of the determinants of post-birth
employment, separately for each country
2) Simulation of a NEW sample for each country, by
using its own estimated parameters and statistics
3) Introduction of the characteristics of the
environment in a dataset which comprises all NEW
samples
Post-birth employment:
The methodological framework
Maximization of household lifetime utility:
at any moment, she decides to participate in the
labour market if
offered wage > reservation wage
her productivity
in the labour market
(human capital)
her productivity at home
(number and ages of her
children)
Post-birth employment:
The 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 child’s age) which impacts on her reservation
wage
Post-birth employment:
The methodological framework
hij ( t j , X i , H i , E r ) 
 1  exp[  exp(     X   H   E
i
i
i
X: woman’s characteristics
H: household’s characteristics
E: economic environment
J: time elapsed from the childbirth
r
  ( J  1))]
Sample selection
European Community Household Panel (ECHP)
Work? No
childbirth
Work? No
Work? Yes
Samples
DK
NL
FI
UK
IE
FR
BE
LU
GE
AU
IT
EL
ES
PT
Number
spells
Number yearobservations
717
1,126
892
1,080
841
1,553
668
627
1,342
596
1,527
881
1,237
1,059
1,494
2,646
1,793
3,185
2,097
3,490
1,313
1,638
3,817
1,439
3,960
2,497
3,577
2,188
Variables in the model
hij ( t j , X i , H i , E r )
X:
woman’s 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)
Variables in the model
Work? No
Work? No
Work? Yes
childbirth
First childbirth?
Potential wage
Time elapsed from the childbirth
Lone mother? Extended family? Other kids?
Household income – Unemployment rate
Post-birth employment:
Results
Positive effect of




the
the
the
the
potential wage
extended family (ES, EL, LU)
first childbirth compared to the subsequent ones
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)
Post-birth fertility:
Descriptive Statistics
Probability of having a second child when the first child is
1 year old
2 years old
3 years old
4 years old
DK
NL
FI
UK
IE
FR
BE
LU
GE
AU
IT
EL
ES
PT
4.5
(443)
3.8
(599)
3.9
(583)
1.6
(754)
1.5
(545)
1.6
(885)
1.3
(299)
1.3
(375)
2.2
(967)
2.3
(346)
1.4
(939)
1.7
(586)
1.9
(903)
0.8
(521)
15.6
(231)
11.5
(433)
23.3
(326)
8.6
(532)
8.6
(372)
8.2
(599)
6.1
(180)
6.8
(310)
7.7
(758)
10.5
(258)
3.9
(725)
8.8
(445)
5.9
(660)
9.0
(324)
30.5
(128)
24.9
(317)
49.4
(154)
24.3
(400)
23.7
(266)
18.1
(398)
22.8
(127)
22.3
(233)
19.3
(559)
19.6
(163)
13.2
(538)
18.7
(347)
12.6
(506)
17.0
(212)
45.9
(61)
34.6
(240)
66.7
(87)
34.4
(294)
32.1
(190)
33.9
(251)
28.1
(89)
35.8
(165)
33.4
(389)
30.8
(120)
22.5
(396)
27.3
(260)
21.8
(354)
31.3
(150)
5 years old
67.6
(34)
41.7
(163)
80.8
(26)
43.3
(208)
37.7
(130)
42
(162)
37.5
(56)
37
(119)
41.2
(250)
35.6
(73)
28.9
(266)
31.6
(177)
24.4
(254)
40.2
(102)
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)
Maternity and parental leaves
in Europe
Maternity leave
Period
Average
(weeks)
replacement
rate
(%)
IT
DK
IE
UK
FI
PT
EL
ES
FR
LU
NL
AT
BE
GE
SE
22
18
18
18
18
17
17
16
16
16
16
16
15
14
14
80
62
70
43
66
100
50
100
100
100
100
100
77
100
80
Total
leave
duration
(months)
12
11
7
8
36
6
7
36
36
12
6
36
6
36
18
Parental leave
Paid period
Father
(% of the
period
total leave) (months)
55
70
0
0
100
8
0
0
100
100
0
100
100
67
79
6
0
3.5
4
0
3
3.5
0
0
6
3
6
3
0
2
Transferable
months
0
11
0
0
36
0
0
36
36
0
0
24
0
36
12
Childcare services in Europe
(%)
Infants
Public
funding
(%)
Opening
hours
(%)
55
40
39
30
23
9
12
10
6
3
3
5
2
2
2
75
85
78
83
85
82
80
82
80
83
80
80
100
65
94
96
100
89
78
87
87
65
65
87
78
78
43
78
91
70
Coverage
DK
SE
FR
BE
FI
GE
PT
AT
IT
LU
EL
ES
IE
NL
UK
Pre school aged children
Coverage
Public
Opening
funding
hours
(%)
(%)
(%)
90
72
87
99
42
73
72
70
87
76
48
77
50
66
60
75
85
100
100
85
82
100
82
91
100
100
100
100
100
100
96
100
70
61
87
58
43
55
70
43
35
43
35
61
45
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**
Cross-country comparison
Denmark
Netherlands
Belgium
Luxembourg
France
UK
Ireland
Italy
Greece
Spain
Portugal
0
.5
1
0
.5
1
0
.5
1
Germany
1
3
4
5
1
2
3
4
5
Finland
0
.5
1
Austria
2
1
2
3
4
5
1
2
3
4
5
age of the child
26 years old, less than secondary
30 years old, tertiary
Graphs by country code
28 years old, secondary
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 woman’s 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