A new model of parental time investments: a paradigm shift for addressing gender inequality in the labour market

This paper introduces a new framework for understanding the persistence of the motherhood penalty by emphasizing the role of on-call care. Using a pseudo-panel event study based on the 2003–22 American Time Use Survey (ATUS), we quantify how different types of parental care time contribute to post-childbirth labour market outcomes. Our results show that gender gaps in on-call care, not primary childcare, drive the long-term reduction in mothers’ paid work. In the first 2 years after birth, declines in paid work are largely explained by primary interactive childcare. Over time, however, on-call care becomes the dominant factor. This shift is not accounted for in existing labour market models, nor in standard policies such as parental leave and childcare subsidies. We argue that the persistent economic costs of gender inequality can be better understood and addressed by integrating the temporal and unpredictable nature of caregiving into economic theory and policy design.