Gender Unemployment Gaps in the EU: Blame the Family

We provide a parsimonious explanation for 80% of the extensive variation in gender unemployment gaps across the EU. We do so by dividing the EU countries into two groups and applying a single explanatory factor within each group. Specifically, we suggest that gender unemployment gaps arise through a mechanism that involves the effect of childbirth on women’s labor force participation. We account for most of the cross-country differences in the said gaps by the prevalence of gender discrimination within the group of countries where many women permanently leave the labor force after childbirth and by the length of statutory family leaves within the remaining group of EU countries. In addition, gender unemployment gaps among individuals with children younger than five result, to a great extent, from the drop in female labor force participation after childbirth, which implies a negative selection of women into the labor force at that stage of life.