Economic Incentives or Social Norms? Labor Supply Differentials between East and West German Mothers

Chabé-Ferret, Bastien, Zainab Iftikhar and JungJae Park

No 21439, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper quantifies the contributions of social norms and economic incentives to the 350-hour annual gap in maternal labor supply between East and West Germany. Using a collective model of family formation and labor supply estimated on GSOEP data from 2000–2017, we find that the working-mother stigma accounts for 73 percent of the gap. Economic factors partially offset the norm: higher Western wages raise the opportunity cost of staying home, so equalizing wages in West to the levels in East would nearly double the gap. We show that standard policy reforms may actually widen the regional disparity, and that their effectiveness is conditional on the norm being present: once removed, the same policies have negligible effects.

JEL-codes: J01 J08 J12 J13 J22 (search for similar items in EconPapers)
Date: 2026-05
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