The effects of childbirth on future labor market outcomes are a key issue
for policy discussion. This paper implements a dynamic treatment approach to estimate
the effect of having the first child now versus later on future employment for the case of
Germany, a country with a long maternity leave coverage. Effect heterogeneity is assessed
by estimating ex post outcome regressions. Based on SOEP data, we provide estimates at
a monthly frequency. The results show that there are very strong negative employment
effects after childbirth. Although the employment loss is reduced over the first five years
following childbirth, it does not level off to zero. The employment loss is lower for mothers
with a university degree. It is especially high for medium-skilled mothers with long prebirth
employment experience. We find a significant reduction in the employment loss for
more recent childbirths.
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