The Willingness to Pay for Job Amenities: Evidence from Mothers' Return to Work

(2012), Industrial and Labor Relations Review 65(2): 10-39

The author examines the extent to which mothers are willing to trade wages for non-wage job attributes within
the context of maternity leave. The key aspect of this framework is that mothers can decide whether and when
to return to their guaranteed job. In contrast to previous studies that analyze the job search of employed
workers, in this framework one does not need to observe the wage/amenity offer process. It is the first study of
its kind to estimate mothers’ marginal willingness to pay (MWP) for job amenities directly. The author derives
the MWP for job amenities from duration data and uses data from the German Socio-Economic Panel and the
Qualification and Career Survey to estimate mothers’ leave-length decisions by a discrete duration method.
The MWP for amenities is inferred through the estimated response of the leave length with respect to the
amenities and the wage. Results indicate that mothers are willing to sacrifice a significant fraction of their wage
to reduce hazards and to enjoy a flexible work schedule.