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

The author examines the extent to which mothers are willing to trade wages for job flexibility 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, this model 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 attributes from duration data and uses German Socio-Economic Panel and Qualification and Career Survey data 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 working schedule.