The Employment of Young Mothers after Birth – Recent Developments and their Determinants in East and West Germany

Barbara Hanel, Regina T. Riphahn
University of Erlangen-Nürnberg, Germany

We apply Mikrozensus data for the period 1996 to 2004 to investigate the employment status of East and West German women in the first years after giving birth. In the considered time period German women could take advantage of parental leave which protected the job of previously employed mothers for up to three years after giving birth. We investigate whether this regulation is correlated with the aggregate patterns of postnatal return to employment. Since German family policy sets incentives particularly for low income mothers not to return to the labor market after a birth, we test whether this influences the development of East-West German employment differences. We find substantial differences between high and low skill as well as between East and West German mothers' employment rates, we observe changes in mothers' employment behavior over time, where particularly East German women with low earnings potentials appear to converge to West German behavior patterns, and we observed the highest rate of return to employment when a child reaches age three.

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