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How Institutions and Local Contexts Shape the Child Penalty: Evidence from Italy's Public and Private Sectors

Author

Listed:
  • Biasi, Paola

    (Italian National Institute of Social Security)

  • De Paola, Maria

    (University of Calabria)

Abstract

This paper examines the labor market consequences of motherhood in Italy, focusing on how institutional and local contexts shape the child penalty. Using INPS administrative data, we track mothers in the public and private sectors from three years before to five years after their first child's birth. Employing an event-study framework with individual fixed effects, we estimate labor market exit probabilities and earnings losses by sector. Mothers face substantial, persistent penalties, much larger in the private sector, particularly regarding employment exits. Local conditions, childcare availability, unemployment rates, and gender norms, affect these outcomes mainly on the extensive margin, while earnings losses for those who remain employed are less sensitive. These contextual effects are strongest in the private sector, while public sector mothers are largely insulated from local factors.

Suggested Citation

  • Biasi, Paola & De Paola, Maria, 2026. "How Institutions and Local Contexts Shape the Child Penalty: Evidence from Italy's Public and Private Sectors," IZA Discussion Papers 18448, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18448
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    References listed on IDEAS

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    1. Mathias Jensen & Abigail Adams & Barbara Petrongolo, 2024. "Birth Timing and Spacing: Implications for Parental Leave Dynamics and Child Penalties," Economics Series Working Papers 1048, University of Oxford, Department of Economics.
    2. Nikolay Angelov & Per Johansson & Erica Lindahl, 2016. "Parenthood and the Gender Gap in Pay," Journal of Labor Economics, University of Chicago Press, vol. 34(3), pages 545-579.
    3. Henrik Kleven & Camille Landais & Johanna Posch & Andreas Steinhauer & Josef Zweimüller, 2024. "Do Family Policies Reduce Gender Inequality? Evidence from 60 Years of Policy Experimentation," American Economic Journal: Economic Policy, American Economic Association, vol. 16(2), pages 110-149, May.
    4. Rafols, Radine, 2025. "Gender norms and child penalties," Labour Economics, Elsevier, vol. 97(C).
    5. Henrik Kleven & Camille Landais & Gabriel Leite-Mariante, 2023. "The Child Penalty Atlas," NBER Working Papers 31649, National Bureau of Economic Research, Inc.
    6. Eva Österbacka & Tapio Räsänen, 2025. "The Importance of Self-Selection and Childcare Leave Length for Child Penalty," European Journal of Population, Springer;European Association for Population Studies, vol. 41(1), pages 1-31, December.
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    Keywords

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    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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