Women's Early Careers and Childcare Policy


Early career years for both men and women are characterized by a fast accumulation of human capital. However, despite comparable working hours, the wages of young men quickly outgrow those of young women, even after accounting for observable differences. One potential reason is that employers take the cost of (long) maternity leave into account when making promotion decisions. In this paper, I first present novel descriptive evidence on the gender gap in early career promotion rates using administrative data from Germany. Second, I exploit quasi-random variation induced by a staggered expansion to identify the causal effect of public childcare availability on women’s pre-birth promotion probabilities. I find that a 10 percentage point increase in public childcare availability improves the promotion probability of young women by 1.7 percentage points, which translates into a 10% increase. This result is consistent with public childcare effectively reducing leave-related costs for employers and thereby boosting women’s pre-birth career prospects through a reduction of statistical discrimination.