You Cannot Force Me Into Caregiving: Paternity Leave and the Child Penalty

Children cause large reductions in earnings for mothers, but not fathers, a stylised fact known as the ‘child penalty’ that explains a substantial portion of remaining gender income gaps. We evaluate the impact of paternity leave, a policy intended to increase fathers’ time with their young children and potentially decrease the child penalty by making caregiving more equitable. Despite fathers overwhelmingly taking up this leave, we detect no impacts on child penalties. We additionally find no impact of paternity leave on the amount of leave fathers take for subsequent children, a good proxy for gender norms within couples. Using detailed data on how mothers and fathers take leave, we highlight one possible explanation: fathers approach parental leave very differently than mothers. Fathers are much more likely to take their paternity leave during summer holidays, when their children are already in formal care, and take more part-time leave than mothers. This tendency is stronger among fathers induced to take more leave by paternity leave quotas than fathers in general, suggesting that quota-induced leave may not lead fathers to act as primary caregivers. Consequently, we show descriptive evidence that child penalties are almost 10 percentage points smaller in families where fathers voluntarily take leave than in families where fathers are induced to take leave by paternity leave quotas.