IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v101y2025i332p41-75.html

Children and the Gender Earnings Gap: Evidence for Australia

Author

Listed:
  • Elif Bahar
  • Natasha Bradshaw
  • Nathan Deutscher
  • Maxine Montaigne

Abstract

We estimate the impact of children on the gender earnings gap in Australia using an event study approach. We show that the arrival of children has a large and persistent impact on the gender earnings gap, reducing female annual earnings by 53 per cent, on average, in the first 5 years of parenthood. We attribute the gap in earnings to lower participation rates and reduced working hours among mothers, including a shift to part‐time work. Although the decline in earnings for women is similar regardless of their breadwinner status prior to children, women with greater access to workplace flexibility are more likely to remain employed after having children.

Suggested Citation

  • Elif Bahar & Natasha Bradshaw & Nathan Deutscher & Maxine Montaigne, 2025. "Children and the Gender Earnings Gap: Evidence for Australia," The Economic Record, The Economic Society of Australia, vol. 101(332), pages 41-75, March.
    • Handle: RePEc:bla:ecorec:v:101:y:2025:i:332:p:41-75
    DOI: 10.1111/1475-4932.12834
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1475-4932.12834
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1475-4932.12834?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. David Neumark & Roy J. Bank & Kyle D. Van Nort, 1996. "Sex Discrimination in Restaurant Hiring: An Audit Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 915-941.
    2. Melanie Wasserman, 2023. "Hours Constraints, Occupational Choice, and Gender: Evidence from Medical Residents," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(3), pages 1535-1568.
    3. Ankita Patnaik, 2019. "Reserving Time for Daddy: The Consequences of Fathers’ Quotas," Journal of Labor Economics, University of Chicago Press, vol. 37(4), pages 1009-1059.
    4. Lundberg, Shelly & Pollak, Robert A, 1994. "Noncooperative Bargaining Models of Marriage," American Economic Review, American Economic Association, vol. 84(2), pages 132-137, May.
    5. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 715-753.
    6. Daniel Avdic & Arizo Karimi, 2018. "Modern Family? Paternity Leave and Marital Stability," American Economic Journal: Applied Economics, American Economic Association, vol. 10(4), pages 283-307, October.
    7. Alexandre Mas & Amanda Pallais, 2017. "Valuing Alternative Work Arrangements," American Economic Review, American Economic Association, vol. 107(12), pages 3722-3759, December.
    8. Baetschmann, Gregori & Staub, Kevin E. & Studer, Raphael, 2016. "Does the stork deliver happiness? Parenthood and life satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 242-260.
    9. Marianne Bertrand & Emir Kamenica & Jessica Pan, 2015. "Gender Identity and Relative Income within Households," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(2), pages 571-614.
    10. Jonathan Guryan & Erik Hurst & Melissa Kearney, 2008. "Parental Education and Parental Time with Children," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 23-46, Summer.
    11. Claudia Goldin, 2014. "A Grand Gender Convergence: Its Last Chapter," American Economic Review, American Economic Association, vol. 104(4), pages 1091-1119, April.
    12. Patricia Cortés & Jessica Pan, 2019. "When Time Binds: Substitutes for Household Production, Returns to Working Long Hours, and the Skilled Gender Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 37(2), pages 351-398.
    13. Peter Siminski & Rhiannon Yetsenga, 2022. "Specialization, Comparative Advantage, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 40(4), pages 851-887.
    14. Druedahl, Jeppe & Ejrnæs, Mette & Jørgensen, Thomas H., 2019. "Earmarked paternity leave and the relative income within couples," Economics Letters, Elsevier, vol. 180(C), pages 85-88.
    15. Jérôme Adda & Christian Dustmann & Katrien Stevens, 2017. "The Career Costs of Children," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 293-337.
    16. Gary Solon & Steven J. Haider & Jeffrey M. Wooldridge, 2015. "What Are We Weighting For?," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 301-316.
    17. Henrik Kleven & Camille Landais & Jakob Egholt Søgaard, 2021. "Does Biology Drive Child Penalties? Evidence from Biological and Adoptive Families," American Economic Review: Insights, American Economic Association, vol. 3(2), pages 183-198, June.
    18. Barbara Pocock, 1999. "Equal Pay Thirty Years On: The Policy and Practice," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(3), pages 279-285, September.
    19. Martin Eckhoff Andresen & Emily Nix, 2022. "What Causes the Child Penalty? Evidence from Adopting and Same-Sex Couples," Journal of Labor Economics, University of Chicago Press, vol. 40(4), pages 971-1004.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jessen, Jonas & Kinne, Lavinia & Battisti, Michele, 2026. "Child penalties in labour market skills," European Economic Review, Elsevier, vol. 184(C).
    2. Leonora Risse, 2025. "By How Much Is ‘Women's Work’ Undervalued in the Economy?," The Economic Record, The Economic Society of Australia, vol. 101(335), pages 421-455, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grönqvist, Erik & Hensvik, Lena & Okuyama, Yoko & Thoresson, Anna, 2026. "Women’s labor market opportunities and equality in the household," Journal of Public Economics, Elsevier, vol. 254(C).
    2. Olivetti, Claudia & Pan, Jessica & Petrongolo, Barbara, 2024. "The evolution of gender in the labor market," Handbook of Labor Economics,, Elsevier.
    3. Grönqvist, Erik & Okuyama, Yoko & Hensvik, Lena & Thoresson, Anna, 2025. "Women's labor market opportunities and equality in the household," Working Paper Series 2025:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Cai, Huan & Dong, Lu & Xie, Jian, 2025. "The Digital Second Shift: Gender Gap in Parenting App Usage in China," CAGE Online Working Paper Series 765, Competitive Advantage in the Global Economy (CAGE).
    5. Cavapozzi, Danilo & Francesconi, Marco & Nicoletti, Cheti, 2024. "Dividing Housework between Partners: Individual Preferences and Social Norms," IZA Discussion Papers 17370, IZA Network @ LISER.
    6. Benny, Liza & Bhalotra, Sonia & Fernández, Manuel, 2021. "Occupation flexibility and the graduate gender wage gap in the UK," ISER Working Paper Series 2021-05, Institute for Social and Economic Research.
    7. Dorothée Averkamp & Christian Bredemeier & Falko Juessen, 2024. "Decomposing gender wage gaps: a family economics perspective," Scandinavian Journal of Economics, Wiley Blackwell, vol. 126(1), pages 3-37, January.
    8. Boinet, Césarine & Norris, Jonathan & Romiti, Agnese & Shi, Zhan & Telemo, Paul, 2024. "Beliefs on Children's Human Capital Formation and Mothers at Work," IZA Discussion Papers 17574, IZA Network @ LISER.
    9. Ziegler, Lennart & Bamieh, Omar, 2023. "What Drives Paternity Leave: Financial Incentives or Flexibility?," IZA Discussion Papers 15890, IZA Network @ LISER.
    10. Frech, Maria & Maideu-Morera, Gerard, 2024. "The Hidden Demand for Flexibility: a Theory for Gendered Employment Dynamics," TSE Working Papers 24-1588, Toulouse School of Economics (TSE).
    11. Popov, Alexander, 2022. "The division of spoils in a booming industry," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 341-369.
    12. Estefanía Galván & Cecilia García‐Peñalosa, 2025. "Interactions among gender norms: Evidence from US couples," Scottish Journal of Political Economy, Scottish Economic Society, vol. 72(1), February.
    13. Alison Andrew & Sarah Cattan & Monica Costa Dias & Christine Farquharson & Lucy Kraftman & Sonya Krutikova & Angus Phimister & Almudena Sevilla, 2022. "The gendered division of paid and domestic work under lockdown," Fiscal Studies, John Wiley & Sons, vol. 43(4), pages 325-340, December.
    14. Gagnon, Nickolas & Bosmans, Kristof & Riedl, Arno, 2020. "The Effect of Unfair Chances and Gender Discrimination on Labor Supply," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).
    15. Dahl, Gordon B. & Loken, Katrine Vellesen, 2024. "Families, Public Policies, and the Labor Market," IZA Discussion Papers 17513, IZA Network @ LISER.
    16. David Felipe-Calvo & José Ignacio Gimenez-Nadal & José Alberto Molina, 2026. "Work Interruptions and the Child Penalty: The role of parental gender," Boston College Working Papers in Economics 1114, Boston College Department of Economics.
    17. Sun, Ang & Sun, Wei & Xiang, Wang & Zhang, Huili & Zhang, Junsen, 2026. "Narrowing or widening the gender gap in market and domestic work? The impact of workweek reduction reform in China," Journal of Development Economics, Elsevier, vol. 179(C).
    18. Frederik Almar & Benjamin Friedrich & Ana Reynoso & Bastian Schulz & Rune M. Vejlin, 2025. "Families’ Career Investments and Firms’ Promotion Decisions," NBER Working Papers 33438, National Bureau of Economic Research, Inc.
    19. Sara Mikkelsen & Noemi Peter, 2024. "More dads at home, more girls in maths‐intensive studies? Evidence from a parental leave reform," Economica, London School of Economics and Political Science, vol. 91(364), pages 1201-1221, October.
    20. Petrongolo, Barbara & Ronchi, Maddalena, 2020. "Gender gaps and the structure of local labor markets," Labour Economics, Elsevier, vol. 64(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:101:y:2025:i:332:p:41-75. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.