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Having It All? Employment, Earnings, and Children

Tobias Laun and Johanna Wallenius

Scandinavian Journal of Economics, 2021, vol. 123, issue 1, 353-381

Abstract: We study the effect of family policies on female employment, fertility, and the gender wage gap. We develop a life‐cycle model of heterogeneous households featuring endogenous labor supply, human capital accumulation, fertility, and home production. Our results suggest that human capital accumulation is important in accounting for the widening of the gender wage gap following children. We find that, in aggregate, childcare subsidies promote maternal employment and fertility, although the effects are heterogeneous across couples. A subsidy on home goods increases female employment, but primarily later in life. Thus, it does not dampen the widening of the gender gap.

Date: 2021
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https://doi.org/10.1111/sjoe.12346

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Working Paper: Having It All? Employment, Earnings and Children (2017) Downloads
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Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten

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