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(Not) Thinking About the Future: Financial Information and Maternal Labor Supply

Ana Costa-Ramón¹; Michaela Slotwinski²; Ursina Schaede³; Anne Brenøe⁴

¹ University of Zurich, Switzerland and Centre for Economic Policy Research , · ² University of Neuchâtel, University of Zurich, University of Basel, Switzerland and CESifo , · ³ Tufts University · ⁴ University of Zurich

Abstract Does information about the long-run financial costs of reduced labor supply increase mothers’ working hours? We document descriptively that long-term financial factors are not top of mind when mothers decide on their employment level. Moreover, a substantial share of women holds overly optimistic expectations about pension receipt and wage growth under part-time work. In a large-scale field experiment in Switzerland, we randomly assign mothers working part-time as teachers to receive objective information about the long-run costs of reduced labor supply. The treatment increases both demand for financial information and future labor supply plans, in particular among women who underestimate the costs of part-time work. Leveraging linked employer administrative data one year post-intervention, we find that this group of mothers increases working hours by 7%. These findings underscore that policies reducing information frictions in labor supply decisions may help address remaining gender gaps in the labor market.

DOI

10.1093/qje/qjag003

Volume

141 (2)

Pages

1335-1382

Language

en

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