Abstract
Sweden boasts high fertility and high female employment. However, part-time employmentis very prevalent. There is a notable gender gap in both wages and earnings,which widens substantially after women have children. In this paper we studythe effect of family policies on female employment, fertility and the gender wagegap. To this end, we develop a structural, life cycle model of heterogeneous householdswhich features endogenous labor supply, human capital accumulation, fertilityand home production. We find that family policies, such as subsidized daycare andpart-time work options, promote maternal employment and fertility. Part-time workcontributes greatly to the widening of the gender wage gap following the arrival ofchildren. However, restricting part-time work options would lower maternal employment, and thereby also widen the gender wage gap.