Abstract
We estimate parenthood wage penalties using panel data for Norwegian employees in the period 1997-2007. The Norwegian institutional setting is one of high female labor force participation and family friendly welfare policies like publicly provided child care, paid parental leave and job protection during the absence. Nevertheless, we find substantial wage penalties to motherhood, ranging from a 1.4% wage reduction for women with lower secondary education to 4.6% for women with more than four years of higher education. The wage penalties we find for women can not be explained by years spent not working or on maternity leave, nor by moving to part time work or public sector employment subsequent to having children. The motherhood wage penalties are however larger for women with higher education and for women who were working full time and in the private sector before having children. Contrary to most results found using U.S. data and previous research for Norway, we find a wage penalty also to fatherhood for men with more than lower secondary education at about .5%. Also for men, the penalty is greater for those who work full time and in the private sector. A substantial share of the fatherhood wage penalty can be explained by paternity leave.