Discussion paper
DP11586 The Career Costs of Children
We estimate a dynamic life-cycle model of labor supply, fertility and savings, incorporating
occupational choices, with specific wage paths and skill atrophy that vary
over the career. This allows us to understand the trade-o between occupational choice
and desired fertility, as well as the sorting both into the labor market and across occupations.
We quantify the life-cycle career costs associated with children, how they
decompose into loss of skills during interruptions, lost earnings opportunities and selection
into more child-friendly occupations. We analyze the long-run effects of policies that
encourage fertility and show that they are considerably smaller than short-run effects.
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