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HR Policies and Maternal Labor Supply

The Example of Employer-Supported Childcare

Series:

Susanne Schneider

The author asks how far the extension of employer-supported childcare serves as a driver for higher maternal labor supply. She addresses this question by categorizing employer-supported childcare as an efficiency wage introduced by the employer to increase the working volume of mothers. Applying various impact evaluation techniques in an econometric analysis, the author concludes that the availability of employer-supported childcare has a positive impact on the length and working volume of mothers who return back to work after giving birth. Furthermore, the usage of employer-supported childcare by mothers with pre-school age children influences the amount of agreed and actual working hours positively.

 

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7. Discussion: ESCC as a Human Resource Policy for Mothers

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7.  Discussion: ESCC as a Human Resource Policy for Mothers

The subsequent sections discuss the results distinctively in regards to return-to-job and working volume distinctly. Afterwards, common implications with a focus on the reference to the theoretical expectations as well as the conclusions of the sections on further effects are compiled. The discussion on the theoretical implications of the both empirical parts is combined since the same framework has been used for both parts and conclusions can be hence deliberated about each other.16 The final part includes as well a discussion on the reasoning of non-significant variables, which have been excluded due to pre-tests.

7.1  Implications on the effect of ESCC on the re-entry to work

The first part of the analysis examined that the availability of ESCC before giving birth positively affects the decision to and point of time when a woman returns to work, which is supported by both descriptive statistics and impact evaluation. Being aware of the additional option of childcare before beginning parental leave seems to influence maternal labor supply positively during the work interruption. The regression results reflect further implications substantial enough to warrant it being highlighted that this part of the analysis excludes mothers who are not returning to work at all. Unfortunately, the chosen method does not allow differentiating between the influence of ESCC on the decision to return-to-work in general or the length of the work interruption.

In line with perceived supervisory support theory (Eisenberger et al., 2002), a sympathetic supervisor seems to influence positively the decision and time to return-to-work. Especially for working mothers, the direct supervisor is able to encourage or discourage work motivation substantially, which is independent of the availability of institutionalized HR policy like ESCC (Casper, Martin, Buffardi, & Erdwins, 2002). It has been revealed that mothers might be reluctant to use ESCC due to a stigmatization of working mothers (Hoobler, 2007). Eisenberger et al (2002) state that direct supervisory encouragement is especially helpful if the supervisor shields the employee from potential stigmatizations (for instance, an employee in a part-time employment mode might overtake responsible tasks). This argumentation is not supported through the interaction between perceived support and ESCC. Hence, a positive effect is not doubled due to a supportive department head in combination with ESCC. ← 159 | 160 →

The more family-friendly HR policies are available, the more positive is the effect on women facing the decision to return to work. Explicitly the different policies are included in the analysis in terms of a continuous scale. This implies that the amount of HR policies is counted. Thereby, the focus is not on the distinct characteristic of the individual policy, but on the implications of providing several HR policies. The amount of HR policies that are advantageous for a certain target group characterize the working environment (Herzberg et al., 1959). In the context of returning to work, this observation supports the statement that the working environment characterized by HR policies is one of many factors for mothers who decide to return to work or stay at home (Fitzenberger et al., 2015). Therefore, to note the difference between availability and the actual use of employee-friendly HR policies is relevant. The theoretical framework by Herzberg et al. (1959) does not address the division between availability and usage, but pre-tests showed far more positive and significant results for the usage of HR policies. Hence, the design of HR policies needs to include, that all employees of the target group benefit from it and are able to use it. Again, the interaction term HR policies and ESCC is insignificant. While ESCC as a distinct determinant is positive, it might be that this positive impact can be offset by other policies. Thus, it does not consequentially need to be ESCC to increase the amount of mothers returning to work after childbirth.

Flexible working arrangements support the re-entry to work after childbirth. The interaction between flexible working arrangement and ESCC does not support the positive effect. While ESCC as itself might be perceived as a restricting or controlling policy (Hoobler, 2007) and flexible working arrangements imply some degree of self-determination (Deci, 1980; Deci et al., 1999), the perception of control due to ESCC might be a matter for mothers who already have a certain degree of autonomy at work. Besides, it could be argued that mothers able to adjust their working time and/or location freely are not dependent on restricting opening times of public childcare facilities (Wrohlich, 2011).

The hypothesis on gaining reputation included that mothers are more likely to increase their employment rates due to ESCC if they state that establishing a reputation in their job is important for them. This statement cannot be supported here; rather the opposite seems to be true. Certain female employees may decide to become mothers, but still have the intrinsic motivation of acquiring a reputation at work (Pollmann-Schult, 2015). Reducing work time might be best defendable before themselves and colleagues, if there are legal requirements or national policies protecting and defending them (Kluve & Schmitz, 2014). Hence, it does not seem to be surprising that the hypothesis is not positively significant, since the target group of this hypothesis does not appreciate ESCC at this point in time.

Concerning irregular working times, the following can be said: While irregular working times seem to be positive and highly significant for the return to work (Beckmann, Cornelissen, & Kräkel, 2015; Stuth et al., 2009), the interaction with ESCC reveals the opposite. Two lines of argumentation might be applicable here. On the one hand, it could be that ESCC does not open at exceptional times, as it is often highlighted in articles promoting ESCC (BMFSFJ, 2006). On the other hand, ← 160 | 161 → it could be that the partner is working at regular times meaning they can take care of the child, too. Especially in the time early after giving birth, parental care might be preferred (Ermisch, 2003).

Greater satisfaction with the salary is associated with a positive effect on work behavior after work interruption. Mothers with a satisfying income have a greater incentive to return-to-work even if they receive only fringe benefits by the state for a time. However, the insignificance of the interaction with ESCC could imply that employees who already are experiencing satisfaction with their compensation for work, do not visibly react to ESCC. For instance, it might be that they are able to buy their preferred kind of childcare. This could be regarded as an extended argument to the fact that efficiency wages have stronger effects if they are surprising. A surprising efficiency wage’s effects cannot be included in someone’s planning (Flynn, 2005; Frey & Jegen, 2001). As shown, employees with a higher standing within the company are less likely to impress upon efficiency wages, “responses to unexpected gifts are considerably stronger toward the bottom of the productivity distribution than at the top” (Baron, 2013, p. 130).

All hypotheses on the economic sectors can be neither confirmed nor rejected due to results being inconclusive. The theoretical framework revealed that working in a distinct sector shapes a specific work environment. This environment might however not be specific enough to influence the decision to return-to-work after childbirth, even if efficiency wages are involved. Time pressure is assumed to have a negative effect in combination with ESCC on the return-to-work behavior. However, the variable was already excluded in pre-tests. Possibly due to the fact that mothers with a great amount of stress at work already assume that their work-related stress level shrinks after giving birth.

The literature review showed that a return-to-work is predominantly influenced by parental leave policies, rather than individual preferences or other factors.17 This might explain that there are certain hypotheses, which cannot be confirmed here. Rather, it seems that there are determinants like the perceived working environment, which influence the return-to-work dimension positively. These are however independent of ESCC, whereby ESCC as itself has a positive and significant influence. The hypotheses on human capital have both been excluded due to pre-tests. Control variables on individual and household income do not show any significance in this context either. It can be assumed that there is a certain degree of correlation between income and education. Both variables might not be explanatory in the context of returning-to work after work interruption due to the parent’s money, which has a comparably high level of salary replacement compared to earlier policies in this field. In other terms, the disposable income could reveal greater explanatory power when the child is growing, but not immediately after giving birth and during the reference period of the parent’s money. The results on gaining a work reputation supported the ← 161 | 162 → importance of parent’s money for mothers since even mothers with greater career ambitions take time off work to be able to care for the child by themselves. This result supports the idea of the introduction of the parent’s money as a paradigm shift in the context of social policy design: The parental leave benefit is valid for up to 14 months with a relatively high salary replacement rate. Parents have a strong incentive to stay home during the first year after birth, but also to re-enter employment within the second year. The policy offers a certain psychological aid to mothers to stay at home, legitimizing a career-pause (Wrohlich et al., 2012). Consequentially, HR policies like ESCC are not very attractive for this target group at this point in time.

When women did return to work, it became interesting to review the relationship of working time, marginal, part-time, full-time, and ESCC. The descriptive results showed that ESCC leads to an increase in part-time work diminishing marginal work participation. This shift in distribution of employment modes has positive implications for the mother. Part-time work is significantly more often offered in unlimited contracts and affects social security taxes. Part-time employment after childbirth thus can have positive long-term implications (Huesmann & Gärtner, 2015). Furthermore, section 2.2 “Maternal working preferences” has revealed that mothers prefer working less than 40 hours per week, but more than working hours in the range of single-digits. Since part-time work increased on the cost of marginal employment and ESCC has no explicit effect on full-time employment, the working time preferences of mothers do not seem to be conflicted due to ESCC. The impact evaluation reveals that there is no significant effect on the return-to-work for marginal and full-time working mothers, but there is on part-time employment. Full-time and part-time work after childbirth are no substitutions, but are based on distinct decisions influenced by certain determinants. Frodermann, Müller, and Abraham (2013) argue that both kinds of employment cannot be optimized simultaneously and with the same instruments, forcing us to treat the results for both separately.

The reason for the insignificance of ESCC on return-to-job behavior in marginal employment might depend on the heterogeneous reaction towards HR policies in general. Workers outside standard employment relationships often profit less from certain work-life balance policies (Mauno & Ruokolainen, 2015). While the policies are mostly addressed to all employees, normative pressures influence both their acceptance and usage (Pasamar & Alegre, 2014). Especially low-skilled workers or workers with a small amount of working hours often need the explicit support of their superiors to use HR policies. Otherwise they might not be aware of it or do not feel authorized to use them. Another reason concerns the work contract. These employees often have temporary, limited contracts (Muse & Pichler, 2011, 2011). Using ESCC, and especially on-site childcare or company-commissioned kindergarten spots, should probably be seen as using ESCC for a sustainable period to ensure the well-being of children. Mothers with this kind of contract might opt out of ESCC.

Concerning the insignificance of ESCC for full-time employed mothers, another argumentation might be applicable. Mothers returning to full-time work immediately after the parental leave benefit ends often have several years of full-time work ← 162 | 163 → experience and pursued promotions previously (Fitzenberger et al., 2015; Frodermann et al., 2013). Since they perceive their working status as important either due to financial reasons or personal preferences, they might already plan childcare before actually giving birth (Konietzka & Kreyenfeld, 2010). To be able to rely on it and work without any guilt due to inadequate or insufficient childcare, they probably already organized their preferred kind of childcare beforehand. Furthermore, it might be that their partner is staying at home and taking care of the children (Hammermann, Schmidt, & Stettes, 2015).

Significant and positive results have been identified for mothers returning to part-time work. The descriptive results revealed that part-time work increased considerably due to ESCC, while marginal employment for mothers decreased substantially in companies offering ESCC. Hence, it could be that these mothers were indifferent about either returning back to work at all or about working marginal or part-time, but a supporting working environment encouraged their labor supply (Casper & Buffardi, 2004). Both, the significant coefficients on perceived supervisory support and the usage of HR policies characterize the working environment. A trusted supervisor could encourage mothers to expand their working hours from marginal employment to part-time employment. The usage of HR policies is relevant since the regression specification inhabits that mothers took advantage of these policies even before the child was born. The satisfaction with the salary as well as the personal significance of the individual income show that a supportive working environment seems to be influential as well as both variables reveal that these mothers do not work strictly due to financial reasons. This observation is supported by the insignificance of the household income and the fact that variables on individual career orientation have either been excluded in pre-tests or do not appear to have significance. ESCC especially reveal high positive results when focusing studies on manufacturers. Since efficiency wages are relatively rare in this sector, the effect of ESCC can be stronger here (Baron, 2013; Flynn, 2005). The significant interaction term on the satisfaction with the salary and ESCC might reveal the following: the extraordinary satisfaction with the salary might itself act as an efficiency wage, leading to a greater work time. The additional effect of ESCC intensified the impact.

Altogether, the effect of ESCC on the return-to-job behavior of mothers can be regarded as positive, but is not a main factor. Firstly, ESCC per se does not seem to ensure the re-entry of mothers into the workforce, but needs to be seen as just one factor forming a perceived supportive working environment. As stated above, the working environment seems to be influential (BMFSFJ, 2008). Dependent on either internal heterogeneous reactions towards HR policies or individual preferences on childcare, mothers working pre-dominantly part-time regard ESCC as a positive influence. The single most influential factor in deciding on re-entry to work, however, seems to be the provision parent’s money. It influences both the length of the break and the amount of work (for instance how much money can be earned within the reference period) substantially. ← 163 | 164 →

7.2  Implications on the effect of ESCC on working volume

The previous section discussed the effect of ESCC, when it is available in a company before a mothers leaves for giving birth. This section focuses on the effect of ESCC when the mothers is already working with young children.

The results on the effect of ESCC on the working volume of mothers with young children revealed in different specifications that the availability of ESCC merely does not influence the working behavior at all. There might be two lines of argumentation applicable why mothers do not use ESCC. Firstly, it could be that there is a divergence between the wish of parents to use it and availability of free spots in case of on-site childcare or rented spots in a local kindergarten. Weßler-Poßberg (2014) analyzed three case studies for Germany. They found that at times there were up to 120 requests by parents, but just 22 free spots. The selection process is mostly depended on having siblings, being a single parent, having worked abroad, and employment status of both parents. Hence, mothers who do not fulfill all requirements but are still in the urgent need of childcare assistance may not have any ESCC benefits. Moreover, Weßler-Poßberg highlighted that in two out of three on-site childcare centers parents could not choose their preferred care time freely. One childcare center allowed the choice between 35 and 45 hours per week while the other one offered only 45 hours. Consequentially, mothers preferring a smaller amount of care time might choose other kinds of childcare.

While the previous argumentation referred to possible restrictions by the provider which might not be tailored to the needs of the parents, it might also be that mothers simply choose not to use it. Thereby, Hooblers’ (2007) argumentation applies that mothers might not be regarded as mothers within the company. While this argument refers to a certain career orientation, it could also relate to a different perspective. It could be that mothers do not want to mix their private and working lives. In a similar vein Casper, Martin, Buffardi, and Erdwins (2002) stated that employees use family-friendly HR policies only if they have a supportive work environment and do not expect negative influences on their private or work lives. This argumentation has been used by Bremke (2016) to explain why Germans tend not to use a home office when given the option. Employees expect negative implications for their career advancements if they are not regularly in the focus of their supervisors. The reasoning differs in case of mothers, namely they are physically at the working place, but it might be that their private responsibilities are pushed into the office. While the reasons for abstaining from certain HR policies differ, employees in both cases do not want to diverge from the regular employment mode.

The results regarding the usage of ESCC might explain the underlying reasons for mothers increasing the labor supply, which might be helpful in addressing why some mothers opt out. For both outcome variables, working time per week and per day, a positive causal effect of ESCC on the working volume of mothers, can be observed. Before discussing the influence of the explanatory variables, implications of using the two distinct types of outcome variables will be made. While ← 164 | 165 → working hours per week refer to the agreed working time between the employer and employee, the daily working time includes overtime as well as work preparation. The first kind of measurement can be regarded as the legally stated work time as written in the work contract, while the second one refers to actual working time. This difference can have substantial implications, especially for employees with childcare obligations. Since overtime and work preparation are often unpaid (Huesmann & Gärtner, 2015), they can be either regarded as the good will of the employee or work forced unto the employer by the company due to work amount. In both cases, employees’ time to be spent with their children decreases. While the main coefficient of working hours per week is absolutely higher compared to the time devoted to work per day, the relative size of the coefficient on the time devoted to work per day rather presumes that ESCC has a greater effect on the actual work time than on the agreed work time.

Concerning the two outcome variables, common implications will be analyzed before highlighting differences. Contrary to the results to the re-entry of working mothers due to ESCC, the working volume seems to be substantially influenced by different sectors. In reference to the health and education sector, mothers are less likely to increase their work volume due to ESCC in the public sector and more likely to do so in the service and manufacturing sectors. There is no effect regarding the influence of knowledge-intensive sectors. These four results are robust over both outcome variables.

Regarding the public sector, the theoretical framework has revealed that efficiency wages are just effective in this sector if they signal rewards (Frey et al., 2013). According to the empirical results, it seems that ESCC cannot be included in this category. Additionally, it seems that mothers with young children working in the public sector are distinctly due to certain interdependent characteristics resulting both from their intrinsic work motivation and their working environment (Weßler-Poßberg, 2014). Significantly contrary to other sectors, several mothers working in the public sector push themselves in certain roles by demanding part-time work in the morning. Being offered flexible working time by the supervisor, most women do not increase their working time. This attitude is predominantly observed for women acting as the secondary wage earner with a medium or high qualification, while mothers with a low education in the public sector are often required to work irregularly with spontaneous work schedules and would like to increase their working volume. While the public sector pushes gender equality and the reconciliation of work and family due to legal requirements, HR policies are often reserved to the ones in regular employment. Hence, it can be noted that the group of mothers, who would preferably use ESCC and as a consequence extend their working volume, are not in the position to use it, and the group of mothers, who could use it do not want to use it.

Both the manufacturing sector as well as the service sector reveal higher maternal employment rates due to ESCC, leading to the question whether the effect is driven by the same determinants. Both sectors are not known for offering efficiency wages. In contrast to the manufacturing sector, the service sector is ← 165 | 166 → often characterized by higher fluctuation rates, more often part-time working conditions, small-scale business structures, atypical working modes and lower wages, resulting in generally worse working conditions compared to other sectors. Contrary, the manufacturing sector is often marked by work councils and labor agreements, leading to a larger amount of written regulations (Ellguth & Kohaut, 2012). This design means that contracts are relatively fixed in comparison to employment modes, for instance visible in the knowledge-intensive sector (Flynn, 2005). Consequentially, it could be assumed that mothers working in the service sector are able to increase their working volume due to ESCC, because the generally worse working conditions, especially the unexpected work schedules, would not allow it otherwise. Mothers working in the manufacturing sector are generally not used to efficiency wages and value them accordingly. This argumentation is in line with the observation that ESCC does not affect mothers employed in knowledge-intensive sectors.

Regarding work schedules, the following observations can be made: Mothers who are not able to work in flexible schemes are more likely to increase their working volume due to ESCC compared to mothers with flexible working arrangements. This result might be a hint for opening times of ESCC, which are either flexible or long (Wrohlich, 2011). Several mothers increase their actual working time due to ESCC, but not mothers in irregular working modes.

The increase in perceived time pressure of mothers using ESCC and increasing their working volume can be explained by the general decrease in freely disposable time, which comes along with an increase in paid time, which is not necessarily dependent on using ESCC or any other kind of ESCC (Kreyenfeld, 2015). The same argumentation can be applied to the increased income across all specifications, namely that an increase in working volume (due to ESCC) goes along with an increased individual income. The inconsistent results within both specifications and between both specifications on gaining a work reputation and salary satisfaction reveal that personal attitudes are not the driving factor here.

The meaningless results on the satisfaction with childcare in both specifications hint that mothers do not change to ESCC due to the overall non-satisfaction with their current childcare in terms of quality. Rather, the other variables allow the assumption that they change their behavior as a reaction to certain working conditions. This observation can be supported by the following assessment: Different specifications revealed that ESCC has the most valuable effect if mothers were working in a company, were ESCC was first available, and then the mothers used it. This situation differed for instance to a situation, in which mothers immediately used it, but it was not just available beforehand. Mothers increase their working volume due to ESCC if they realize that ESCC facilitates the combination of working and child caring without having negative side effects. It can be concluded with certainty that ESCC provides conditions which allow the extension of working hours for a group of mothers who are working for a company having ESCC, but who are just using it after being aware of it. ← 166 | 167 →

The control variables, especially the ones on income, can help to shed light on the question whether mothers work solely due to financial pressures. The previous discussion on the re-entry into work is biased in a sense, since the effects of the salary replacement of the parent’s money cannot be isolated. The individual income is consistently significant implying that mothers with a relatively high income increase their working volume due to ESCC. Since the variables on education and firm-specific human capital do not reveal significance, it cannot be assumed that employed mothers with a certain standing within the company are overwhelmingly benefiting from ESCC. On the other hand, it also leads to the assumption that financially weaker mothers do not start working due to ESCC. The last conclusion is additionally supported by the fact that the household income shows no useful interpretable data. Other control variables do not reveal consistent results either, leading to the conclusion that they bare no influence on the usage of ESCC, which in turn could influence labor supply.

The results on the indirect effect of ESCC (for instance through the usage of the father) inhabited no conclusive results. There do not seem to be differences between the availability or usage of ESCC by the father. Nevertheless, it should be discussed why there seems to be no positive indirect effect as it can be assumed that fathers would relieve mothers. It might be that there is a certain amount of mothers who do not re-start working at all, preferring to focus on children and household (Bertram, Rösler, & Deuflhard, 2015; Lauber et al., 2014). This distribution of paid and unpaid work within the household might be especially prevalent if the father has a well-paid job or is self-employed, and if ESCC responds to their needs. also, the mother might be in a phase of occupational re-orientation (Fitzenberger et al., 2015), such as pursuing additional education and hence benefit from the involvement of the father in childcare. While the assumptions cannot be justified in the context of this analysis, future research should consider these issues extensively. These two arguments address practical issues, while the following returns to the discussion of gift exchange theories: individuals reciprocate when they perceive a gift. Therefore, the usage of ESCC by the father is not regarded as a gift to the mothers, since it is not her employer who is offering it, but the employer of the husband. The mother, thereby, has no reason to provide an extraordinary work effort.

To conclude, the following implications can be derived: Firstly, the usage of ESCC has a positive influence on both the agreed but also the actual working time. The availability of ESCC is not sufficient, nor is the usage by the father. Moreover, the effect of using ESCC on working volume is stronger if the mother was offered it beforehand, but did not use it. Secondly, contrary to the analysis on the re-entry into work, there is a substantial amount of explanatory power coming from the economic sectors. Hence, contrary to entering employment after childbirth, the influence of the individual and subjective perceived working environment is downsized through the general working attitude of the sector. Thirdly, work schedules are relevant when deciding on using ESCC. ← 167 | 168 →

7.3  Overall implications of ESCC for maternal labor supply

After having discussed the meaning of the distinct empirical results, the following section will address the results in context. Both, the results concerning the re-entry to work and the work volume are derived from the same theoretical framework, but are the implications the same?

The Homo Economicus per se assumes that individuals react positively on external incentives (Kirchgässner, 2008). However, there also might be the intrinsic motivation, which implies that individuals would like to increase their labor supply due to their own interests. It has been proven in section 2.2 “Maternal working preferences” that several mothers of young children would like to extend their working time, but external circumstances hamper them. Thereby, it needs to be highlighted that several mothers do not regard financial reasons as the main argument for a preferred increase in working time (Lauber et al., 2014). Several reasons hint that mothers enjoyed their working life before giving birth and would like to return to the previous working status.

Further, from the theoretical perspective, including social preferences in the equation of (maternal) labor supply and external incentives, it can be argued that the intrinsic work motivation can be either crowded in or crowded out due to incentives (Frey & Jegen, 2001). The phenomenon of crowding out does not seem to be applicable here. None of the results in all kinds of analysis spoke to the ESCC influencing maternal labor supply negatively.18 However, it needs to be highlighted that ESCC can be regarded as a voluntary incentive, meaning that employees with childcare obligations are not forced to use ESCC. In other kinds of gift-exchange settings, the prevailing situation differs. For instance, the introduction of access to internet at the workplace can be perceived as a controlling policy if it is introduced without requesting it and with a strict supervisor (Koch & Nafziger, 2015). The perceived feeling of losing self-determination is one determining reason for the crowding out effect of intrinsic work motivation (Deci & Ryan, 1985). This implies in turn that a potentially negative effect of ESCC on maternal labor supply would be visible only if employees were forced to use them and employees perceived this ‘enforcement’ negatively. Due to its nature, the enforcement of ESCC would affect the private life of the employees, which implies that the crowding out effect could be intensified since about one quarter of the employees regard the involvement of the employer in the employees’ private lives as outside their responsibilities or rights (Anderson, Birkeland, & Giddings, 2009). Since it can be assumed that the participation in ESCC is voluntarily, mothers who do not like the idea of receiving childcare support from their employer can ignore it. ← 168 | 169 →

The results reveal that ESCC leads to results which can be classified as potential effects akin to an efficiency wage. In turn, it supports the conclusion that an efficiency wage can be interpreted in a broader way than just monetary terms. This conclusion is in line with further literature, as for instance the access to the internet can be regarded as an efficiency wage under certain conditions (Koch & Nafziger, 2015). Kosfeld and Neckermann (2011) observe that efficiency wages may also exist in form of a non-material status and/or social recognition rewards. Thereby, it is important to highlight that non-monetary efficiency wages do generally have a greater impact than monetary efficiency wages, due emotional responses experiencing gift exchange (Kube, Maréchal, & Puppe, 2012). Furthermore, non-monetary efficiency wages have a longer lasting impact than financial ones, since employees remember the positive impact of the incentive. This observation is valid only, however, if the employees perceive the present as useful (Becker, Messer, & Wolter, 2013). This is in line with Maximiano, Sloof, and Sonnemans’ (2007) observations that intention-based reciprocity is the main driving force behind the gift-exchange rather than social preferences of employees. Since the variable of childcare satisfaction does not seem to be influential here, it could be assumed that the reactions of mothers on ESCC are not (at least exclusively) due to worse alternatives, but rather because they want to reciprocate. At least some part of the positive reaction can therefore be regarded as coming from social preferences.

Concerning the heterogenic reactions of employees, certain ones might reciprocate to a large degree (Ng & Feldman, 2015). The results have demonstrated that there seems to be a higher impact of ESCC on the actual compared to the agreed working time. While there is no data providing insights on whether overtime is paid or unpaid, it should be noted that it would be fairer if the increase in agreed working time received some form of pay-out. This conclusion is supported by Ruffle (1999), stating that an incentive cannot be regarded as a gift, if the psychological benefit is outbalanced by the cost for reciprocity.

Going on, a non-monetary efficiency wage may have further implications since it expresses additional characteristics. In the context of ESCC, it implies that there are potential spillover effects to life besides working life. This interaction is non-existent for monetary efficiency wages. Hence, it could be questioned whether efficiency wages introduced by the employer are an effective instrument if the efficiency wage is connecting both domains. It may be assumed that they can be effective if the employee does not perceive the working environment as negative. In that case, it would be the preliminary task of the employer to change the working environment achieve a positive perception. Afterwards, the efficiency wages could have a positive impact. Similarly, it can be argued that mothers act in the best interest of their child (Ermisch, 2003), meaning they would not use ESCC if it were perceived negatively.

ESCC provides indications of a positive effect on increased working effort, however, in dependence on further factors, as the theoretical framework has argued that the intrinsic motivation might be affected by further determinants as well. Herzberg et al. (1959) distinguish between the hygiene factors, which serve as lower needs fulfillment, and motivators, which are higher needs fulfillment. It is here argued that ← 169 | 170 → the intrinsic motivation might be affected by further determinants as well, meaning Herzberg et al. argue that both can be used independently of each other. Here, the hygiene factors have been used to systematically explain which determinants may influence the effects of ESCC. Thereby, it has been revealed that factors belonging to hygiene factors like satisfaction with the salary, usage of HR policies, or perceived supervisory support, show a positive impact on the re-entry into work, more so than on working volume. Hence, it can be concluded that hygiene factors are more important for the decision to re-enter employment than the decision to increase employment. In Herzberg’s terms, mothers reenter employment faster and on a higher level if they are surrounded by positive hygiene factors. This implies that they are not dissatisfied with their working environment (Oechsler & Paul, 2015). According to Herzberg et al., the fulfillment of the lower-order needs is basic for the expansion of higher-order needs, which in turn have a positive impact on the intrinsic motivation. As it is shown below, several of the lower-order needs show support of working efforts, allowing the expansion of higher-order needs. The empirical part of this study has supported Herzberg et al.’s arguments that not all lower-order needs need to be fulfilled for to engage a greater working effort. This is contrary to Maslow who argues that all of them need to be approached.

Altogether, it can be concluded that the (partial) fulfillment of lower-order needs can provide a basis for positive emotional responses to the gift-exchange by Akerlof. The potential influence of working in distinct economic sectors has not been considered in Herzberg’s theory. However, economic sectors distinguish themselves from one another by establishing prevailing norms, regulations, or laws. These characteristics mark the employees and in turn influence their working behavior (Frey et al., 2013), making their inclusion in the category company policy and administration logical. Especially the economic sectors had a significant impact on the working volume, which is in line with the efficiency wage research.

According to Hwang and Bowles (2014), crowding effects of incentives may have two different effects on human behavior, independent of crowding in or crowding out. It can be either categorical, meaning that the effect on the social preferences depend on presence or absence of incentives, or marginal, implying that the effect depends on the extent of the incentives. Both part of the empirical results underlined that the mere provision of ESCC is not sufficient to increase the working behavior of mothers. Concerning the re-entry to work after childbirth, a supporting environment is indispensable. Concerning the working volume, firstly a sufficient amount of places needs to be available. Moreover, the time schedules of the mothers need to be designed in a way that ESCC is a preferred alternative over other kinds of childcare. Thirdly, the working atmosphere engraved by the economic sectors play a substantial role for the effect of the efficiency wage.

The literature review as well as the empirical results revealed that the length of work interruption is substantially influenced by parental leave benefits. This fact can explain why there is an effect of ESCC among others, which is positive, but rather small (BMFSFJ, 2008). In general, it might be hard for an efficiency wage to offset prevailing legal and societal norms (Osterloh et al., 2014), especially in the ← 170 | 171 → context of maternal employment, which includes the consideration of additional human being (Ermisch, 2003). However, it should be noted that there is a positive effect of ESCC on the re-entry, supported by other determinants. The satisfaction with the salary can be interpreted as an original efficiency wage by Akerlof, if the employees state that they are highly satisfied with their salary. The positive perception of other family-friendly HR policies requires a look at the various HR policies. For example, consultancy in matters concerning the reconciliation of family and work could use the same interpretation as ESCC for the operationalization as an efficiency wage (see section 4.2.3. “Application of gift-exchange theory on ESCC”). The perceived supervisory support does not show the characteristics of the efficiency wage as it is coming directly from the supervisor and is not a policy by the employer. The classification of flexible working arrangement as an efficiency wage is less straightforward, “On the one hand, increased motivation associated with higher worker authority may raise performance. On the other hand, workers can abuse their authority and this can reduce performance” (Beckmann et al., 2015, p. 2). Depending on the occupation, it might, however, sometimes not be possible to enjoy a certain freedom since the employees need to be locally available or approachable for other colleagues or clients (Silim & Stirling, 2014). Independent of being classified as an efficiency wage or not, the main benefits of flexible working arrangements for employed mothers deal with a larger degree of independence on standard childcare opening times. However, mothers who are not used to flexible working arrangements might value them even more (Baron, 2013). This argument might be valid also for irregular working time; since irregular working time shows a negative coefficient in dependence on ESCC, it cannot be argued that less restricted opening times and ESCC are a reason for re-entering employment after childbirth faster or on a higher level of time involvement.

Altogether, it could be stated that a kind of bundle of efficiency wages consisting of ESCC, satisfying salary, and additional family-friendly HR policies seem to be relevant for the re-entry to work, but none of them individually (BMFSFJ, 2008). The provision of ESCC before giving birth does not imply that the mother is necessarily using it. Rather, it provides the possibility of using it in the future. This can imply a psychological effect. Moreover, it should be noted that there are other determinants, which cannot be regarded as an efficiency wage per se. While it probably does not matter for the employees whether they perceive their working environment as positive due to efficiency wages or due to other reasons, there might be implications for the provider of them. In this case, it might be difficult for an employer to introduce perceived supervisory support as it needs to come directly from the supervisor, and it is difficult to quantify it. For instance, if a child is ill, a mother needs spontaneous flexible work arrangements; the reaction of the supervisor to such requests might influence essentially whether mothers feel free to leave work or worried by doing so. Here, the employer here enforces limited power to ensure a family-friendly working environment. Kosfeld and Neckermann (2011) investigate a way of employers’ institutionalized non-material, family-friendly support. The employer provided a hand-written thank-you card to acknowledge the work of the employee. ← 171 | 172 →

Concerning the working volume, the effect of the so-called bundle of efficiency wages is less pronounced here (BMFSFJ, 2012b). Rather, the economic sectors are influential. As already highlighted, the economic sectors are elementary to scholarship on gift-exchange settings. Concerning the economic sectors and maternal employment, section 2.1. “Male, female and maternal labor force participation” revealed that women are predominantly working in the sectors of human health and social work, education, public administration, and social security. In reference to the results at hand, no consistency can be found between economic sectors with a great share of female employees and economic sectors with higher effects of ESCC. Hence, it might not be that the preferred sectors for women do influence the reaction to efficiency wages, but rather the general work environment. This is in line with the observation that the effect of efficiency wages is not dependent on the size of the beneficiaries (Maximiano et al., 2007).

Re-entering employment after childbirth and the working volume of mothers with young children can be classified as two distinct categories in terms of employment modes. Both modes deviate from the standard economic relationship with continuous full-time work (Blau et al., 2006).

It could be argued that the analysis of the working volume of mothers with young children is closer to the regular employment modes than the effects on the re-entry to work. While children are a major influence in the life of a mother when it is in pre-school age, it might be that mothers are used to consider them in their daily working life and plan accordingly. Then, it might be that mothers’ working behavior adjusts to the general working atmosphere. On the contrary, the return-to-job decision is made during the first time after giving birth, during which the mother is still getting used to everything. During this time, the mother might be predominantly influenced by individual concessions like usage of certain HR policies and satisfying salary rather than general working environment. The goal of facilitating maternal employment rates in terms of working volume and re-entering employment needs to be approached with various strategies. ESCC seems to be addressing both kinds of employment modes in distinct ways. Concerning the re-entry, ESCC seems to be one of several factors, which might support a faster return-to-work or an entrance on a higher working time level. The working volume seems to be more influential distinctly from ESCC as an efficiency wage.

Different implications of both employment modes can be observed for the results on the working schedules. In summary, concerning the re-entry into work, flexible working arrangements have a positive effect, lessened in impact when ESCC enters the equation. Irregular working times may have positive effects on the decision to return to work, the working volume, ESCC is more encouraging for maternal labor supply when mothers have no flexible working arrangements or if they have irregular working times. While the results seem to be contradicting at first glance, they must be seen in context. Both flexible working arrangements and irregular working time have a positive effect on the re-entry to work, diminishing in combination with ESCC. ESCC supports the labor supply when the working arrangements are flexible or irregular. Concerning irregular working time, it might be that mothers use their ← 172 | 173 → partner as the childcare opportunity during the re-start into work, who probably has regular working times. When the child is growing, and the irregular working time remains, mothers might use ESCC as a reliable alternative to the partner, who might also work outside standard working times. Since many parents prefer non-parental care as children age (Ermisch, 2003), ESCC might grow in importance. According to this argumentation, it can be concluded that ESCC is indeed adjusting to time preferences of working mothers. In line with this argumentation, mothers with young children and without flexible working arrangements are more dependent on it than mothers restarting work, since ESCC might be valued more at this later point than directly after giving birth.

Based on the discussion in section 2.3.3.1 “Reasoning and framework for family-friendly human resource management”, it could be assumed that companies provide ESCC out of self-interest. Hence, they want to keep and attract employees with a high potential on pushing the economic well-being of the company (Kinnie, Hutchinson, Purcell, Rayton, & Swart, 2005). The underlying results do not support this impression. Firstly, there is no comprehensive support of a pre-selection into companies with ESCC, meaning that just higher-qualified women are working in companies with ESCC. Concerning the re-entry to work, some variables showed that mothers in companies with ESCC have a higher qualification, but this was not consistent. Regarding the working volume, no signs of a pre-selection within the descriptive statistics could be observed, which in turn showed the importance of doing PSM. Secondly, variables in the regression specification never revealed that mothers with a high education or a high company-specific human capital changed their behavior significantly due to ESCC more than others. Although the study at hand does not reveal whether ESCC support has been offered to certain groups of employees before others. This result has been investigated in a study from Canada, but the groups were rather consisting on the marital status than on economic resource of the employee (Zeytinoglu, Isik, Cooke, Gordon, & Mann, 2010). According to Baron (2013), a company generally offering ESCC-beneficiaries might even be in the interest of the employer, as star-employees generally value efficiency wages to a smaller degree compared to non-star employees. Higher standing employees are more used to additional benefits, and do not value the distinct one accordingly. In this context, it could be questioned whether the concrete target of ESCC on employees with childcare obligations includes negative side effects for employees, who do not benefit from it. However, there is a positive tendency that non-parents appreciate ESCC as well (Feierabend et al., 2011; Grover & Crooker, 1995). Nevertheless, it has been proven that a frustration effect can appear for parents, who are on the waiting list for on-site childcare (Kossek & Nichol, 1992). In addition, unemployed people or employees in temporary positions value ESCC to a higher degree compared to employees who had been working at one firm longer (Casper & Buffardi, 2004; Connelly, Degraff, & Willis, 2004). Nevertheless, there is also some evidence that all employees depending on certain life stages increase their commitment (Casper et al., 2002) as well as loyalty (Roehling et al., 2001) and decrease the absenteeism rates (Anderson & Geldenhuys, 2011) due to ESCC. Nevertheless, there ← 173 | 174 → are also some studies, which do not find a positive effect on either of the dimensions (Goff et al., 1990; Lehmann, 2011; Ratnasingam et al., 2012). There is thus no guarantee for an employer that the introduction of family-friendly HR policies, and especially ESCC, influence the work behavior and attitude positively.

The previous revealed the implications of ESCC for mothers from the perspective of personnel economics, reviewing ESCC as a potential HR policy for increasing labor supply. Thereby, it has been ignored that the company is not legally obliged to provide childcare, but the state is.19 The mother cannot trust that the employer is offering ESCC at all or continuously. Thereby, it needs to be highlighted that providing ESCC, especially on-site childcare, is an enormous task for an employer (BMFSFJ, 2006). Section 2.3.3.3. “Economic effects for the firm” revealed that consistent evidence of economic benefits for the company itself cannot be found. Hence, it might be that companies put effort into providing ESCC during economic times of prosperity, but neglect or abolish such provisions during recessions.

This paragraph deals with the effects of the individual characteristics of working environments, since research has shown that there is a remarkable influence of them on maternal labor supply. It is remarkable that the control variables on individual characteristics in this study generally do not exhibit substantial explanatory power. The insignificance of the results concerning living in former East or West Germany shall not lead to the impression that the inter-German cultural differences do not exist anymore. Rather, it seems that the cultural attitudes do not influence the reaction to efficiency wages. While living in former East or West Germany generally influences maternal labor supply, it seems that cultural attitudes are rendered irrelevant through social preferences towards efficiency wages or the working environment.

It has been shown that the influence of the income is distinguishable. While household income does not seem to be influential at all, a higher individual income is often associated with greater maternal labor supply. A higher individual income can be assumed to be related to a general satisfaction with the employment situation, which might explain its positive significance in the context of ESCC as a driver for maternal employment. This analysis does not shed light on the question whether the mothers need to work out of financial reasons. However, it could be assumed that mothers with a low household income need to work out of financial reasons, but that they do not want to be dependent on ESCC. For instance, if they have the opportunity of switching to a higher paid job, the usage of on-site childcare could be a potential obstacle.

Several variables acquired attention during the course of the thesis, which have been excluded, through pre-tests, in the econometric models. The following paragraph will address potential reasons for their exclusion.

One variable frequently mentioned in the context of family-friendly HRM concerns the size of the company. Generally, a greater company offers more and a wider ← 174 | 175 → range of policies aiming at an improvement of the reconciliation of family and work (BMFSFJ, 2013b). There are two potential reasons for the non-significance of the size of the company in this context. Firstly, the availability of HR policies is unequal to the usage of them. While it is probably the goal of a provider of on-site childcare to exploit all free spots, other kinds of ESCC might be promoted primarily for marketing reasons (Mohe et al., 2010). Secondly, gift exchange appears to be robust to increases in the size of the employees, meaning that the effect of the gift does not depend on the relation between the gift giver and the size of the beneficiaries (Maximiano et al., 2007). In this context, it would imply that the effects of ESCC on individual labor supply does not change if a greater number of mothers are using it. The distance between the living place and working place, in other words the commute, is also of concern. Weßler-Poßberg (2014) observed that several mothers preferred childcare facilities which are close to their living place, since children are able to meet their classmates and it eases post-work pick-up. It might be that parents facing a long ride to the work place organize local childcare without considering ESCC at all. Hence, providing ESCC at their workplace would not alter their behavior. Pre-tests according to occupational groups revealed no significance in regards to occupation, which is in line with Stuth et al. (2009), but rather its characteristics. In addition several interactions between the variables of the hypothesis have been tested, like distinct economic sectors in combination with irregular working times. However, biased results lead to their excluding here.

Section 2.1 „Male, female and maternal LFP“ has concluded with the observation that the gender wage gap is resulting from the three dimensions gender time gap, vertical, and horizontal separation (Allmendinger, 2010). It is unlikely that horizontal separation is influenced by ESCC since it is introduced after the occupation is chosen and therefore not relevant. Regarding the vertical separation, it has been revealed that star employees are neither the primary target group of ESCC nor increasing their employment rates due to ESCC. Female employees with strong career ambitions push for advancements without reliance on ESCC. However, it might be that the gender-time gap decreases due to ESCC slightly, since mothers may shift their date of re-entry to work or increase their working volume. This could mean more likely promotions or tasks with more responsibility for this mother, showing a delayed effect of vertical separation. Moreover, it can be assumed that the gender-wage gap might converge immediately slightly due to the increased labor supply. Thereby, it should be remembered that this effect may be small, since only a small degree of mothers is using it early on, and not all employed mothers even want to use it.

Altogether, the results have demonstrated that the perceived working environment is a major determinant for the maternal labor supply. This conclusion is in line with other studies on maternal employment (Casper et al., 2002). ESCC can be regarded as one determining factor shaping the working environment. Inter alia, ESCC promotes that the private life of the mother is an issue at the workplace. While the presumed mixing of private and working lives might be one factor, it has also been proven that the working atmosphere itself can (dis-)courage labor ← 175 | 176 → supply. These observations are in line with Lutz (2014), who concludes that “deficits of subjective welfare at the workplace are compensated for by turning to the family, which in turn accelerates family formation” (Lutz, 2014, p. 52). While her observations are based on the transition to parenthood, the present results refer to the transition to employment after becoming a parent. In both cases, the employment mode has been identified as a major determinant for the interaction of parenthood and employment, implying that the focus on the welfare state needs to be extended.


16 The term maternal labor supply is used as an umbrella term of both the re-entry into work and the working volume of mothers.

17 The hypothesis on childcare satisfaction has been excluded from this part of the regression specifications (see section 5.4.1.2. “Application”).

18 While some specifications on the indirect influence of ESCC inhabited a negative coefficient, these were not significant or consistent.

19 A mother is even allowed to fight in court for a spot in a public childcare facility (Müller and Wrohlich 2014).