How much does it cost to stay at home? Career interruptions and the gender wage gap in France.

1. How much does it cost to stay at home?Career interruptions and the gender wage gap in France. Dominique MEURS, Ariane PAILHE and Sophie PONTHIEUX August 2007 Lower conference - Volos, Grece. 10/11 september 2007

2. Motivation • Main gender difference in human capital : difference in work experience. Why? Children! a part of mothers takes time out of the labour market ==> less work experience, depreciation of skills, signal of weak motivation Family gap literature • France : high rate of female participation thanks childcare facilities. So this question was not an issue until recently • Change in the parental leave allowance (1994) : employment breaks after birth is more frequent and longer. = => recent interest in the implication of career interruption on the gender wage gap.

3. Objectives • Which impact of various type of career breaks in the estimation of returns to total experience? • Which effect of the number of children on the earnings? • Which penalty of the career interruption for women?

4. Data set • Enquête Familles et Employeur - Ined 2005 • Individuals aged 20-49 • Respondents were asked about their activity history since the age of 18 • Individual variables, incl. total number of children (# number of children at home) • Limitation : cross section, no data panel

5. Sample descriptive statistics • Original sample : 9547 observations, • Here, sample limited to paid workers and potential workers : 7562 individuals • Excluded : students, retired or self employed • Wage earners (minimum : 10 hours a week) : 6049 individuals (3034 males and 3015 females)

6. Basic statistics

7. Measure of experience • Potential experience : number of years since the end of initial education EXPP (Potential experience) +Tenure (ANCI) • Actual Experience EXPV (Actual experience) +Tenure (ANCI) • Breaks in work Unemployment (NBCHO), Out of the labour market (NBINAT)

8. Potential and actual work experience

9. Impact of the measure of experience… 3 specifications • Lwh = a EDUC + b EXPPV + c ANCI + e (1) • Lwh = a EDUC + b EXPV + c ANCI + e (2) • Lwh = (2) + d NBCHO + g NBINAT (3)

10. Results

11. And the impact of the children • Lwh = a EDUC + b EXPV + c ANCI +  NBENFT + e (2a) • Lwh = a EDUC + b EXPV + c ANCI + d NBCHO + g NBINAT + f NBENFT +e (3a) • Lwh = (3a) + t LAMBDA (3c)

12. Results

13. Complete specification • Lwh = a EDUC + b EXPV + c ANCI + h JOBset + controls + e (2b) • Lwh = a EDUC + b EXPV + c ANCI + d NBCHO + g NBINAT + h JOBset + controls + e (3b) • Lwh = (3b) + t LAMBDA + e (4) • JOBset • Controls

14. Results

15. Impact of children over the wage distribution • quantilic regressions (QR) Returns to children at different deciles

16. The gender wage gap and the interruption gap • the gender wage gap for salaried aged 39 & + is composed of 2 parts : Wm – Wf = Wm – Wf1 + k (W f1 – Wf2) 0.17 0.10 0.608 * 0.12 • Each part is decomposed using Oaxaca-Neuman methodology

17. Decomposition of the “interruption” wage gap between women aged 39-49

18. Decomposition of the gender wage gap in the population aged 39-49

19. Concluding and provisional remarks • No difference in actual experience returns once taken into account job characteristics and time spent out of the labour market • No direct negative effect of the number of children on mothers’ earnings • For aged 39-49, differences in earnings between women are explained, mainly by differences in the total experience; differences in earnings between men and women without break in participation are not explained by observable characteristics • To be done : exploit more individual biographies