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What Causes the Child Penalty? Evidence from Same Sex Couples and Policy Reforms

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Women experience significant reductions in labor market income following the birth of children, while their male partners experience no such income drops. This “relative child penalty” has been well documented and accounts for a significant amount of the gender income gap. In this paper we do two things. First, we use a simple household model to better understand the potential mechanisms driving the child penalty, which include gender norms around child care, female preferences for child care, efficient specialization within households, and the biological cost of giving birth. The model, combined with the estimated child penalties for heterosexual and same sex couples, suggests that the child penalty experienced by women in heterosexual couples is primarily explained by female preferences for child care and gender norms, with a smaller contribution due to the biological costs of giving birth. Second, we provide causal estimates on the impact of two family policies aimed at reducing the relative child penalty: paternity leave and subsidized early child care. Our precise and robust regression discontinuity results show no significant impact of paternity leave use on the relative child penalty. Early subsidized care seems to have more promise as a policy tool for affecting child penalties, as we find a 25% reduction in child penalties per year of child care use from a large Norwegian reform that expanded access to child care.

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  • Emily Nix & Martin Eckhoff Andresen, 2019. "What Causes the Child Penalty? Evidence from Same Sex Couples and Policy Reforms," Discussion Papers 902, Statistics Norway, Research Department.
  • Handle: RePEc:ssb:dispap:902
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    2. Duchini, Emma & Van Effenterre, Clémentine, 2020. "School Schedule and the Gender Pay Gap," IZA Discussion Papers 13791, Institute of Labor Economics (IZA).
    3. Charlotte H. Feldhoff, 2021. "The Child Penalty: Implications of Parenthood on Labour Market Outcomes for Men and Women in Germany," SOEPpapers on Multidisciplinary Panel Data Research 1120, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Willage, Barton & Willén, Alexander, 2020. "Postpartum Job Loss: Transitory Effect on Mothers, Long-run Damage to Children," Discussion Paper Series in Economics 22/2020, Norwegian School of Economics, Department of Economics.
    5. Boneva, T. & Kaufmann, K. & Rauh, C., 2021. "Maternal Labor Supply: Perceived Returns, Constraints, and Social Norms," Cambridge Working Papers in Economics 2138, Faculty of Economics, University of Cambridge.
    6. Berniell, Inés & Berniell, Lucila & Mata, Dolores de la & Edo, María & Marchionni, Mariana, 2021. "Gender gaps in labor informality: The motherhood effect," Journal of Development Economics, Elsevier, vol. 150(C).
    7. Persson, Petra & Rossin-Slater, Maya, 2019. "When Dad Can Stay Home: Fathers' Workplace Flexibility and Maternal Health," CEPR Discussion Papers 13780, C.E.P.R. Discussion Papers.
    8. Ong, David & Yang, Yu (Alan) & Zhang, Junsen, 2020. "Hard to get: The scarcity of women and the competition for high-income men in urban China," Journal of Development Economics, Elsevier, vol. 144(C).
    9. Xiao, Pengpeng, 2021. "Wage and Employment Discrimination by Gender in Labor Market Equilibrium," Working Papers 144, VATT Institute for Economic Research.
    10. Inés Berniell & Lucila Berniell & Dolores de la Mata & María Edo & Yarine Fawaz & Matilde P. Machado & Mariana Marchionni, 2020. "Motherhood and the Allocation of Talent," CEDLAS, Working Papers 0270, CEDLAS, Universidad Nacional de La Plata.
    11. Francisco Cabrera-Herández & María Padilla-Romo, 2021. "Women as Caregivers: Full-time Schools and Grandmothers’ Labor Supply," Working Papers 2021-03, University of Tennessee, Department of Economics.
    12. Amélie Speiser, 2021. "Back to work: the effect of a long-term career interruption on subsequent wages in Switzerland," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 157(1), pages 1-14, December.
    13. Elira Kuka & Na'ama Shenhav, 2020. "Long-Run Effects of Incentivizing Work After Childbirth," NBER Working Papers 27444, National Bureau of Economic Research, Inc.
    14. Benjamin Hansen & Drew McNichols, 2020. "Information and the Persistence of the Gender Wage Gap: Early Evidence from California's Salary History Ban," NBER Working Papers 27054, National Bureau of Economic Research, Inc.
    15. P. Pora, 2020. "Keep Working and Spend Less? Collective Childcare and Parental Earnings in France," Documents de Travail de l'Insee - INSEE Working Papers g2020-05, Institut National de la Statistique et des Etudes Economiques.
    16. Andrew, Alison & Cattan, Sarah & Costa Dias, Monica & Farquharson, Christine & Kraftman, Lucy & Krutikova, Sonya & Phimister, Angus & Sevilla, Almudena, 2020. "The Gendered Division of Paid and Domestic Work under Lockdown," IZA Discussion Papers 13500, Institute of Labor Economics (IZA).
    17. Alessandra Casarico & Salvatore Lattanzio, 2021. "Behind the Child Penalty: Understanding What Contributes to the Labour Market Costs of Motherhood," CESifo Working Paper Series 9155, CESifo.
    18. Fontenay, Sébastien & Tojerow, Ilan, 2020. "Work Disability after Motherhood and How Paternity Leave Can Help," IZA Discussion Papers 13756, Institute of Labor Economics (IZA).
    19. Danielle Sandler & Nichole Szembrot, 2019. "Maternal Labor Dynamics: Participation, Earnings, and Employer Changes," Working Papers 19-33, Center for Economic Studies, U.S. Census Bureau.
    20. Cortes, Patricia & Pan, Jessica, 2020. "Children and the Remaining Gender Gaps in the Labor Market," IZA Discussion Papers 13759, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Gender wage gap; labor supply; child penalty; paternity leave; child care; same sex couples; event study; regression discontinuity; instrumental variables;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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