An Empirical Assesment of Effects of Parenthood on Wages

In this paper we characterise the selection into parenthood for men and women separately and estimate effects of motherhood and fatherhood on wages. We apply propensity score matching exploiting an extensive high-quality register-based data set augmented with family background information. We estimate net effects of parenthood and find that mothers receive 7.4% lower average wages compared to non-mothers, whereas fathers gain 6.0% in terms of average wages from fatherhood.