Small jobs, such as the so-called Minijobs in Germany, appear to be particularly attractive to mothers. About 15 percent of first-time mothers who were in full-time employment before the birth of their child take up a Minijob when they return to the labor market after a child-related break. The workload is usually only a few hours per week, and because Minijobs are publicly subsidized, they are not subject to income tax or social security contributions. The gross income is therefore equal to the net income.
However, compared to regular (even part-time) jobs, Minijobs are often less demanding and provide limited skill development, which means that the work experience they provide may later be considered inferior. Does taking a Minijob after childbirth have long-term negative consequences for mothers’ labor market success?
Persistently larger child penalties
A recent IZA paper by Matthias Collischon, Kamila Cygan-Rehm, and Regina T. Riphahn examines the long-run consequences of subsidized small jobs using the example of German Minijobs. The authors analyze administrative data to compare the long-term “child penalties” of mothers who started out in Minijob employment versus those who returned to unsubsidized (regular) employment after childbirth.
They find persistently larger child penalties for Minijob mothers compared to otherwise employed mothers up to ten years after the first birth. Specifically, mothers who took a Minijob after giving birth are almost 10 percentage points less likely to be in regular (unsubsidized) employment a decade later. In addition, returning to the labor market as a “Minijobber” persistently increases the child penalty in earnings by at least 10 percentage points compared to returning to regular employment.
Lower pension entitlements
The Minijob program is one of the largest labor market programs in Germany, subsidizing employment with earnings below a certain income threshold (currently 538 euros, increasing to 556 euros in 2025). Although intended as a stepping stone to regular employment for the unemployed, Minijobs may trap some individuals in unskilled jobs with low earnings.
The results of the current study suggest that this applies particularly to mothers, who typically reduce their working hours substantially after the birth of a first child. The negative consequences for mothers’ labor market outcomes over the long term translate directly into lower pension entitlements. More broadly, the findings highlight the unintended consequences of public policies that subsidize small jobs.