Impact of First-Birth Career Interruption on Earnings: Evidence from Administrative Data

Julie. L Hotchkiss, M. Melinda Pitts, and Mary Beth Walker
Working Paper 2014-23
November 2014

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This paper uses unique administrative data to expand the understanding of the role women's intermittency decisions play in the determination of their wages. We demonstrate that treating intermittency as exogenous significantly overstates its impact. The intermittency penalty also increases in the education level of the woman. The penalty for a woman with a high school degree with an average amount of intermittency during six years after giving birth to her first child is roughly half the penalty for a college graduate. We also demonstrate the value of using an index to capture multiple dimensions of the intermittency experience, and we illustrate the importance of firm dynamics in the determination of a woman's wage.

JEL classification: J13, J31, J22

Key words: intermittency, administrative data, career interruptions, fertility, labor supply, wage differentials

The authors gratefully acknowledge Keyung Wang and Chunying Xie. They also thank Christopher R. Bollinger and the participants in the University of Colorado Department of Economics seminar series for helpful comments. The views expressed here are the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility.
Please address questions regarding content to Julie Hotchkiss, Federal Reserve Bank of Atlanta and Georgia State University, Research Department, 1000 Peachtree Street NE, Atlanta, GA 30309-4470, 404-498-8198, julie.l.hotchkiss@atl.frb.org; M. Melinda Pitts (contact author), Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street NE, Atlanta, GA 30309-4470, 404-498-7009, melinda.pitts@atl.frb.org; or Mary Beth Walker, Andrew Young School of Policy Studies, Georgia State University, PO Box 3992, Atlanta, GA 30302-3992, 404-413-0254, mbwalker@gsu.edu.