Child Penalties and Gender Inequality.

• Author: Kleven, Henrik J.

The idea that parenthood has differential effects on women and men is not new. However, recent work has developed new and transparent ways of estimating the magnitude of child penalties--the negative effects of having children on the labor market outcomes of women relative to men. This research quantifies how much of gender inequality child penalties explain and studies their underlying drivers.

While this research agenda is ongoing, a clear picture is beginning to emerge: child penalties account for most of the remaining gender inequality in labor market outcomes, at least in developed countries, and they cannot be explained by traditional mechanisms rooted in biology, comparative advantage, or public policies. Rather, child penalties seem to reflect social norms about the roles of men and women, norms that vary strongly across space and demographic groups. Further reductions in gender inequality will require a reduction in child penalties, which in turn requires a change in gender norms. This view represents a strong departure from traditional research on gender inequality, which focused on human capital accumulation and discrimination. In this article, I present a nontechnical review of my recent work on child penalties.

Child Penalties: The Facts

To set the scene, Figure 1 presents evidence on child penalties in the United States. The results are taken from my 2022 study, (1) and they are based on the event study approach I developed with Camille Landais and Jakob Egholt Sogaard. (2) The figure shows the evolution of employment and earnings for men (black lines) and women (blue lines) around the birth of a first child. The year of the first child's birth is indexed as event time t = 0, marked by the dashed vertical line. The outcomes of both men and women have been normalized to zero in a base year before a child's birth (specifically at t = -2), so that outcomes in any given year are measured relative to that pre-child base year. Changes relative to the base year are reported in percentages.

The findings are striking. The outcomes of men and women are almost perfectly parallel before childbirth, and diverge immediately and sharply after childbirth. Having a child is a nonevent for men, but leads to an immediate and persistent drop in employment and earnings for women. Parenthood reduces female employment by 25 percent and female earnings by 33 percent, relative to males. These estimates are obtained from event studies around the first child's birth and do not condition on the total number of children. As a result, the child-driven gap between men and women reflects the impact of subsequent children as well. (3) The size of the child penalty increases with the number of children.

The preceding estimates are based on data from 1968 to 2020. As shown in my 2022 study, US child penalties have declined significantly over time, but virtually all of this decline occurred prior to the mid-1990s. Since that time, child penalties have been stagnant, a finding that explains the observed slowdown of gender convergence in recent decades.

How does the US compare with other countries? My study with Landais and Sogaard provides evidence from Denmark, while another study with Landais, Johanna Posch, Andreas Steinhauer, and Josef Zweimiiller provides evidence from a number of countries in Europe and North America. (4) In ongoing work, Landais, Gabriel Leite Mariante, and I are building a global database of child penalties. (5) The bottom line is that the qualitative patterns in Figure 1 apply to almost every country, but the quantitative magnitudes vary greatly. As an illustration, Figure 2 provides evidence from two European countries: Denmark and Switzerland. Child penalties in Denmark are considerably smaller than in the US...