Monday, 6 May, 2024 | 14:00 | Room 402 | Applied Micro Research Seminar

Ana Costa-Ramón (University of Zurich) "(Not) Thinking about the Future: Inattention and Female Labor Force Participation"

Ana Costa-Ramón, Ph.D.

University of Zurich, Switzerland

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 Authors: Ana Costa-Ramón, Ursina Schaede, Michaela Slotwinski, Anne Brenøe

Abstract: The "child penalty'' significantly reduces women’s lifetime earnings and pension savings, but it remains unclear whether these gaps are the deliberate result of forward-looking decisions. This paper provides novel evidence on the role of cognitive constraints in mothers’ labor supply decisions. In a large-scale field experiment that combines rich survey and administrative data, we provide mothers with objective, individualized information about the long-run costs of reduced labor supply. The treatment increases demand for financial information and future labor supply plans, in particular among women who underestimated the long-term costs. Leveraging linked employer administrative data one year post-intervention, we observe that these mothers increase their actual labor supply by 6 percent over the mean.