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Returning to Work – Mothers ’ Willingness to Pay for Amenities *

By Andrea Christina Felfe


Are working mothers willing to give up part of their wage in order to avoid adverse job features, such as hazards, physical strains or inflexible working schedules? This study is the first to directly estimate mothers ’ marginal willingness to pay (MWP) to reduce these disamenities. The identification strategy relies on German maternal leave length data. Among OECD countries, Germany entitles mothers with the most generous parental leave (36 months). The key aspect of the maternal leave framework is that mothers can decide whether and when to return to their guaranteed job. Thus, in contrast to previous studies that analyze the job search of employed workers, this framework allows us to overcome the limitations of modeling an explicit wage/disamenity offer process. A theoretical model of the leave length decision is derived from a random utility approach. Using data from the German Socio-Economic Panel and the Qualification and Career Survey, the model is estimated by a discrete duration method that assumes a logistic hazard function. The MWP to avoid disamenities can be inferred through the estimated elasticities of the leave length with respect to the disamenities and the wage. The results provide evidence that mothers are willing to sacrifice a significant fraction of their wage to reduce hazardous working conditions (25 % for a decrease of one standard deviation) and to enjoy a working schedule compatible with available daycare (more than 50%). JEL-Code: Keywords

Year: 2007
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