Maternal Labor Supply: Perceived Returns, Constraints, and Social Norms
Mothers with young children face the decision of working full-time, part-time, or not at all. They decide very differently: in Germany, for example, approximately 36% of mothers worked full-time, 37% worked part-time, and 27% did not work at all in 2019 (OECD Family Database). Various determinants of female labor supply have been examined in the literature, including family policies, cultural norms, the availability of childcare, and part-time employment opportunities. A factor that has received little attention so far is the perceived return to maternal labor supply: How do people perceive the benefits and costs to mothers working, and how are those beliefs related to maternal labor supply decisions?
We investigate these questions using a new survey administered among 4000 German adults that elicits quantifiable measures of beliefs about how labor supply decisions affect later-life earnings, children's skill development, family members' satisfaction, and the relationship between them. To elicit beliefs about the returns to maternal labor supply, we present respondents with scenarios of a hypothetical family in which we vary whether the mother works part-time, full-time, or not at all while her child is 1 to 5 years old. In addition to asking respondents about their beliefs on how the different scenarios affect child and family outcomes and future earnings, we measure beliefs about the opinions of family and friends and the availability of childcare as well as intended labor supply in a hypothetical scenario in which full-time childcare is abundant.
The study provides several interesting insights. Respondents rightly expect that future earnings increase in the number of hours worked when the child is young. The mother working and the child attending childcare is also believed to positively affect different dimensions of children's skills - vocabulary, intelligence, ability to concentrate and work independently, and, most strongly, social skills. Satisfaction of the child and the parents, as well as the quality of the mother-father and mother-child relationship, are perceived to be higher when the mother works part-time rather than not at all. However, working full-time is perceived to lead to lower child satisfaction and a worse relationship between mother and child than working part-time. On beliefs about social norms, we find that respondents think that family and friends would prefer mothers to work part-time rather than full-time or not at all.
Since maternal labor supply decisions may depend heavily on the availability of childcare, we compare intended labor supply choices with the choices respondents state they would most likely make if there were no constraints to childcare availability. We find that mothers would be more likely to work in the absence of childcare constraints. This highlights the need for public policy to expand the provision of full-time childcare. In addition, we estimate a choice model to show that beliefs about non-pecuniary returns and the opinion of friends and family strongly predict maternal labor supply choices, whereas beliefs about future earnings do not. Finally, we analyze differences in beliefs among different population groups. For example, respondents in West Germany perceive the returns to full-time work as significantly lower than those in East Germany. This is consistent with the fact that maternal labor supply has historically been considerably higher in the East than in the West.
The results are broadly consistent with the results from a sample collected in Canada, suggesting that the findings are not unique to the German context.
Understanding subjective expectations about the returns to female labor supply is crucial for designing effective policies against gender inequality in the labor market. Our paper highlights the importance of non-pecuniary factors for a mother's decision to work while her children are young.