Effects of Postponing Fatherhood on Wages: A Comparison of West Germany and the United Kingdom

Linda Vecgaile , Max Planck Institute for Demographic Research (MPIDR)

Birth postponement is a phenomenon that has been evolving for decades already causing negative impact on long-term demographic trends and future socioeconomic perspectives. Existing research has shown that the postponement of first childbirth can lead to positive career and wage outcomes among women. However, past literature has overlooked the potential variability in the fatherhood wage effects based on the fatherhood timing. This raises a question, whether (1) men who become fathers earlier in their career life earn different post-birth wages than men who enter fatherhood later, and whether (2) results are stable across societies, which differ in their socioeconomic setting, such as Germany, which is often referred to as a coordinated market economy with strong male-breadwinner legacy, and the UK, which represents a liberal market economy with two-earners family as a norm. To resolve the issue, I employ longitudinal panel data and fixed-effects models. Birth postponement is estimated in terms of actual work experience, instead of biological age, to capture more closely returns to human capital. This study has identified that men who enter parenthood later experience a steeper wage trajectory compared to “earlier” fathers, however, they are associated with lower wage returns to additional year of experience compared to “earlier” fathers.

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 Presented in Session 16. Labour Market and Parenthood