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We provide new evidence of forward-looking labor supply responses to changes in pension
wealth. We exploit a 2014 German reform that increased pension wealth for mothers by an
average of 4.4% per child born before January 1, 1992. Using administrative data on the
universe of working histories, we implement a difference-in-differences design comparing
women who had their first child before versus after January 1, 1992. We document significant
reductions in labor earnings, driven by intensive margin responses. Our estimates imply
that, on average, an extra euro of pension wealth reduces unconditional labor earnings by
54 cents.
