Does the public sector play a role in shaping the impact of motherhood on women’s careers?

Abstract

We use Brazilian employer-employee data to investigate the impact of motherhood on women’s careers in the labor market, with a focus on disparities between the private and public sectors. The arrival of children significantly affects labor force participation and wages, largely driven by changes in hourly wage dynamics. Using an event study approach, our findings reveal a 20% decline in labor force participation in the private sector and a 10% decline in the public sector. This sectoral difference in the impact of motherhood is attributed to the stability and job security provided by the public sector. Mothers employed in the private sector experience a 10% drop in their wages, while wages in the public sector remain stable. We identify specific mechanisms contributing to the child penalty, including occupational choices, sector preferences, and firm-related decisions. Additionally, our findings show that mothers with lower levels of education, fewer skills, lower salaries, and employment in smaller firms face greater challenges in maintaining their positions in the formal labor market. Conversely, more educated and highly skilled mothers, earning higher salaries and working in larger firms, encounter greater difficulties in recovering their pre-childbirth wages. Our evidence contributes to the understanding of the impacts of motherhood on women’s careers in Brazil, highlighting sector-specific dynamics and their implications for labor market outcomes.