Punishing potential mothers? Evidence for statistical employer discrimination from a natural experiment

Abstract

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Gender differences in the skill content of jobs

“…We do not find evidence that less skill-intensive tasks are allocated to women because employers underestimate their cognitive skills (Altonji and Pierret 2001). Recent literature shows that women who are more likely to become pregnant based on their observable characteristics earn less (Yip and Wong 2014;Becker et al 2019;Jessen et al 2019). However, we find that age and education-specific birthrates have only a minor effect on skill use at work.…”

“…The second type of discrimination we investigate is based on the fertility rate of specific cohorts. This exercise is motivated by recent studies showing that women who have higher fertility rates based on their education, age, and marital status earn less (Yip and Wong 2014;Jessen et al 2019) and are less likely to be hired for part-time jobs (Becker et al 2019). Altonji and Pierret (2001) studied this issue and found that employers cannot observe individual skills at the beginning of their workers' career, but firms can learn over time and get information about individual skills.…”

A Firm-Side Perspective on Parental Leave

“…The new benefit system replaced the previous means-tested benefits with an earnings-based paid parental leave system. Benefits were paid for up to 12 months to either parent and replaced 67 percent of the average net labour women's pre-birth net earnings (Jessen et al, 2019). Changes in these regulations are not a threat to our quasi-experimental analysis where we focus on a paid parental leave reform in 2007 and analyse births after this policy change.…”

Gender, Parenthood, and Hiring Intentions in Sex-Typical Jobs: A Survey Experiment

“…Women of childbearing age, irrespective of current parental status, could be discriminated against with respect to men (Gupta and Smith, 2002;Petit, 2007;Yip and Wong, 2014;Baert, 2014;Biewen and Seifert, 2016;Becker et al, 2019;Jessen et al, 2019): we name this our family-risk hypothesis. Under statistical discrimination, therefore, we do not expect a motherhood penalty.…”

“…In fact, a strong formulation of the family-risk hypothesis would suggest that mothers may be even preferred to childless women. Employers might assume mothers completed their maternity leave period(s) at another firm and, conversely, fear childless women will have their maternity break at some point if hired (see Petit, 2007;Jessen et al, 2019).…”