(Not) Thinking About the Future: Financial Information and Maternal Labor Supply

This paper investigates whether information constraints — rather than fully forward-looking choices — contribute to mothers’ reduced labor supply after childbirth, a key driver of gender inequality. The authors deploy two complementary methods in Switzerland: a representative descriptive survey of Swiss mothers aged 25–50, and a large-scale randomized controlled trial (RCT) among approximately 2,400 female public school teachers with children who work part-time.

The descriptive survey first establishes that long-term financial factors are not top of mind for mothers making labor supply decisions: only about 11% of mothers spontaneously mention pensions or long-term career considerations when asked about their post-childbirth employment choices, compared to roughly half who mention child or own well-being. Beyond salience, the survey documents substantial misperceptions: 62% of women over-estimate pension receipt under part-time work by more than 10%, and a similar share believes wage growth under low part-time hours (40% FTE) is at least as high as under 80% employment. The authors label mothers with overly optimistic beliefs on both dimensions “cost-unaware”; 42% of the sample qualifies. Cost-unawareness is more prevalent among less-educated mothers and correlates with less financial interest and more gender-conservative attitudes.

The RCT tests whether providing objective, individualized information shifts financial planning and labor supply. Teachers in treatment schools (two-thirds of all schools) were individually randomized into a treatment group viewing an informational video about the long-run earnings, pension, and life-event consequences of sustained part-time employment, plus access to a Future Calculator tool, or a placebo video on unrelated financial topics. The two-stage randomization (school-level first, then individual within treated schools) allows identification of both direct treatment effects and spillovers. Outcomes are measured in a Wave 1 post-video survey, a follow-up survey two months later, and linked administrative personnel records from the Department of Education one year post-intervention.

Main findings: treated teachers are 31.26 percentage points (58% over the pure control mean) more likely to correctly rank the relative magnitude of long- versus short-term financial factors. Demand for financial planning tools rises by 0.39 standard deviations (SD) overall and by 0.31 SD among cost-unaware women specifically. In terms of stated labor supply plans, the treatment raises planned employment for the next academic year by 1.69 percentage points (ppt) in the full sample and by 4.95 ppt (9% over the pure control mean) among cost-unaware women. These plan effects persist two months later for cost-unaware women but fade for the full sample.

Critically, stated plans translate into verified behavior: linked administrative data one year post-intervention show that cost-unaware teachers increase their contracted employment level by 3.87 ppt, or 7% over the pure control mean of 53.30% FTE. Cost-aware and overly pessimistic women do not reduce their labor supply upon learning they are better off than feared, an asymmetry consistent with agents responding more to perceived losses than gains. If the 3.87 ppt increase were sustained from age 40 onward, cost-unaware teachers would accumulate an additional 130,000 CHF in lifetime income and 40,000 CHF in pension wealth, shrinking the gender gap in lifetime income and pension receipt among teachers by approximately 18% each.

The paper is scoped to Swiss female public school teachers — a population with linear pay scales, no part-time promotion penalty, and relatively low adjustment barriers — meaning the measured lifetime earnings and pension losses likely represent a lower bound relative to other occupations. Short-term RCT findings replicate among a sample of pregnant women in the general Swiss population, and the paper argues that similar labor supply adjustment magnitudes are feasible for a broader segment of part-time working mothers.

Q: What is the central research question and why does it matter? A: The paper asks whether mothers’ post-childbirth reduction in labor supply is partly driven by information constraints — specifically, whether mothers fail to account for the full long-term financial consequences of working reduced hours. This matters because if the child penalty partly reflects uninformed choices rather than deliberate tradeoffs, standard policy tools (parental leave, childcare subsidies) may underperform precisely because their long-term financial benefits are not internalized.

Q: How prevalent is cost-unawareness among Swiss mothers? A: 62% of mothers in the descriptive survey over-estimate pension receipt under part-time work by more than 10%, a similar share believes wage growth under low part-time (40% FTE) is at least as high as under 80% employment, and 42% are overly optimistic on both dimensions simultaneously. Cost-unawareness follows an education gradient: 77% of low-education women over-estimate pension receipt versus 51% of high-education women.

Q: What share of mothers spontaneously considers long-term financial factors when deciding on their labor supply? A: Only about 11% of mothers mention any long-term financial factor (pensions, financial independence, long-term career considerations) in open-ended responses; the share is similarly low across education groups (6% low, 12% mid, 13% high). About 50% mention child or own well-being; roughly 30% raise short-term financial factors such as current childcare costs.

Q: What are the actual long-term financial stakes of the average female teacher’s part-time employment pattern in Switzerland? A: Compared to full-time employment, the average female teacher’s employment trajectory produces a 35% reduction in potential lifetime earnings (approximately 3.34 million CHF versus 5.12 million CHF). Monthly pension receipt under the part-time scenario is 31% lower overall and 43% lower from the occupational second-pillar scheme specifically — a gap comparable to the average 47.5% gender pension gap observed in the second pillar in Switzerland in 2024.

Q: How was the RCT designed and what populations were included? A: The study recruited 2,359 part-time working mothers employed as public school teachers in a German-speaking Swiss canton. A two-stage randomization assigned two-thirds of schools to treatment schools (within which teachers were individually randomized 50/50 to treatment or spillover control) and one-third to pure control schools. This design allows estimation of direct treatment effects and spillover effects. The intervention was timed to precede December–January, the period when teachers communicate their preferred employment levels for the next school year.

Q: What was the treatment intervention? A: Treated teachers watched an informational video following a representative female teacher considering an employment-level increase, covering the impact of part-time work on lifetime earnings, monthly pension receipt, and financial exposure after adverse events such as divorce; it also benchmarked these magnitudes against childcare costs. Treated teachers additionally received individualized access to the Future Calculator, an online projection tool developed with a Swiss bank, calibrated to teachers’ deterministic salary and pension schedules.

Q: Did treated teachers understand and retain the treatment information? A: Yes. Treated teachers were 31.26 ppt (58% over the pure control mean) more likely immediately after the intervention to correctly rank long- versus short-term financial factors in a vignette. Two months later, the treatment group remained significantly more likely to apply the information correctly (22.63 ppt higher), indicating the knowledge was not short-lived.

Q: How did demand for financial planning tools respond to the treatment? A: The treatment raised a financial information/tools index by 0.39 SD overall. For cost-unaware women specifically, demand for financial tools rose by 0.31 SD; cost-aware and pessimistic women showed no significant change. There was no significant average treatment effect on sign-up for an incentivized financial consultation.

Q: How large were the labor supply plan effects in the survey, and did they persist? A: For the full sample, treated teachers planned a 1.69 ppt higher employment level for the next school year immediately after the treatment, and 3.13 ppt higher in 10 years. For cost-unaware women, the short-run planned increase was 4.95 ppt (9% over the pure control mean of about 55%), and plans for 5 and 10 years into the future rose by approximately 4 ppt (6–7% over the mean). The short-run effects for cost-unaware women persisted to the two-month follow-up, while full-sample short-run effects faded.

Q: What do the linked administrative data show about actual labor supply one year post-intervention? A: Cost-unaware women in the treatment group increased their contracted employment level by 3.87 ppt relative to the pure control group (7% over the pure control mean of 53.30% FTE), closely matching the planned increase stated immediately after the treatment. Cost-aware women and the full sample showed no statistically significant shift in actual hours.

Q: What asymmetry did the authors observe between cost-unaware and cost-aware women? A: Cost-unaware (overly optimistic) women increased their labor supply upon learning the true financial costs; cost-aware and overly pessimistic women did not reduce their labor supply upon learning they were better off than expected. The authors interpret this as consistent with agents responding more to perceived losses (bad news for cost-unaware women) than to gains (good news for pessimistic women), and with cost-aware women already having incorporated the financial logic into their decisions even without precise estimates.

Q: What is the estimated lifetime impact of the observed labor supply adjustment? A: If cost-unaware teachers maintain the 3.87 ppt employment increase from age 40 to retirement, they accumulate an additional 130,000 CHF in lifetime income and 40,000 CHF in pension wealth on average. This would reduce the gender gap in both lifetime income and pension receipt among teachers by approximately 18% each.

Q: What emotional and social mechanisms did the paper document? A: The treatment initially produced significantly negative emotional responses (−0.41 SD on an emotions index overall; −0.68 SD for cost-unaware women), consistent with cognitive dissonance from information conflicting with prior beliefs. Two months later, the treatment group reported feeling more in control and less stressed, and cost-unaware women returned to a neutral emotional baseline. Treated women were also 19.61 ppt more likely to have discussed the topic with anyone, with the largest effect on conversations with partners or family.

Q: Did the treatment affect household-level labor supply — specifically, did partners reduce their hours? A: No. The authors found no evidence that partners of cost-unaware women planned to work less in response to the treatment, and women did not plan to adjust future fertility. This suggests the observed hours increase by treated cost-unaware women was not offset by partner adjustments within the household.

Q: Were there social spillover effects within schools? A: Treated teachers were 11.59 ppt more likely to report having discussed the video with colleagues. Two months later, cost-unaware control teachers in treated schools (the spillover group) showed some evidence of absorbing the general treatment message and adjusting short-term labor supply plans upward, and a noisy increase in actual employment of roughly one-third the magnitude of the direct treatment effect, though these estimates were imprecise.

Q: Why might cost-unaware women be uninformed in the first place? A: In both the descriptive survey and the RCT sample, cost-unaware women lean more gender-conservative in their attitudes and report less interest in financial topics. The authors interpret this as suggesting a lack of information (rather than mere salience or forgetting) drives cost-unawareness, implying that passive information delivery through employers or pension funds could be effective.

Q: What constraints to labor supply adjustment did the authors explore? A: In a hypothetical scenario exercise, the scenario producing the largest desired employment increase for both treatment and control groups was if the partner were more engaged (roughly double the adjustment relative to a scenario of higher pay for additional hours). The treatment group adjusted their desired employment level by an additional 0.62–2.03 ppt relative to pure control across all scenarios except relaxing conservative gender norms.

Q: How generalizable are the findings beyond the teacher sample? A: The short-term RCT findings replicated among a sample of pregnant women in the general Swiss population. The authors also document that potential net gains from increasing labor supply — net of additional childcare costs — are large for the broader population of part-time working Swiss mothers, supporting feasibility of similar-magnitude adjustments outside teaching. The teaching context likely represents a lower bound for lifetime earnings and pension losses in other professions due to the absence of a part-time promotion penalty in teaching.

Q: What are the policy implications? A: The findings suggest that default exposure to individualized financial information about the long-term costs of part-time work — delivered by employers, pension funds, or the state — could improve decision quality and labor supply. More broadly, the results imply that policies designed to increase female labor supply (parental leave reforms, childcare subsidies) may underperform if mothers do not fully internalize the financial benefits of additional hours; ensuring that families solve the correct optimization problem is a precondition for unlocking the full potential of such policies.

Child Penalty: The large and persistent reduction in women’s labor force participation and income following the birth of a first child, identified in the paper as the key driver of remaining gender inequality in the labor market in industrialized countries and a source of profound life-cycle financial consequences including reduced lifetime earnings and pension savings.

Cost-Unaware: The authors’ term for women who hold overly optimistic expectations about the financial consequences of part-time work — specifically, who over-estimate pension receipt under low part-time employment by more than 10% and who believe wage growth under low part-time is at least as high as under higher employment levels. In the descriptive survey 42% of mothers qualify on both dimensions.

Future Calculator: An online individualized projection tool developed by the authors in cooperation with a Swiss bank, calibrated to teachers’ deterministic salary and pension schedules, allowing users to estimate the long-term financial implications of different employment levels. Used both in the descriptive survey vignette and as part of the RCT treatment.

Second Pillar (Occupational Pension Scheme, PP): Switzerland’s occupational pension scheme, the pillar most heavily affected by part-time work because contributions are directly proportional to earnings above a minimum annual earnings threshold. The paper documents an average gender pension gap of 47.5% in this pillar in 2024 and a 43% lower monthly pension receipt for the average female teacher’s part-time trajectory relative to full-time employment.

Two-Stage Randomization: The experimental design used to separate direct treatment effects from spillover effects within schools. One-third of schools are assigned to a pure control group; in the remaining two-thirds, teachers are individually randomized into treatment or spillover control (untreated teachers in treated schools), enabling identification of both causal treatment impacts and social learning channels.

Information Constraint: The paper’s central mechanism — mothers’ failure to spontaneously account for the full long-term financial implications of reduced labor supply when making employment decisions, distinct from deliberate forward-looking tradeoffs. The authors document this both through the absence of long-term financial factors in open-ended decision narratives (only 11% of mothers mention them) and through systematic misperceptions of pension and wage outcomes.

Cognitive Dissonance (as used in the paper): The authors use this term to describe the initial negative emotional response (−0.41 SD overall, −0.68 SD for cost-unaware women) when treated women learn that the true financial costs of part-time work are higher than they expected — information that conflicts with prior beliefs and prior choices, producing unpleasant emotions that subsequently reverse into lower stress levels two months later.