• Chart of the Week
  • July 14, 2021

Understanding the child penalty

Anikona

Women tend to fare significantly worse than men in the labor market after the birth of a child. In fact, these child penalties account for most of the remaining earnings inequality between men and women in high-income countries.  

Many explanations have been offered. A common one argues that biological factors unique to women, such as childbearing and breastfeeding, could play an important role.

But a paper in the American Economic Review: Insights pours cold water on that theory.

Authors Henrik Kleven, Camille Landais, and Jakob Egholt Søgaard separated the effects of having a child from the effects of giving birth to a child by comparing adoptive parents with biological parents in Denmark.

Panel A of Figure 1 from their paper shows the overall effects on earnings for each type of mother and father several years before and after the arrival of a child.

 

 

Panel A of Figure 1 from Kleven et al. (2021)

 

The chart shows that the earnings of both adoptive and biological fathers were not impacted by the arrival of a child, as indicated by the nearly flat, parallel light blue lines.

However, both adoptive and biological mothers saw a large drop in earnings after the arrival of a child. Biological mothers saw a slightly larger decrease in earnings compared to adoptive mothers, but those differences disappeared after roughly five years.

Ten years after the arrival of a child, both groups of mothers saw a decrease in earnings of nearly 20 percent.At that point, there was almost no difference between the biological mothers (dark blue line with open circles) and the adoptive mothers (dark blue lines with closed circles). 

The underlying determinants of earnings—participation, hours worked, and wage rates—showed a similar pattern; the authors found almost no difference between biological and adoptive families along any of those dimensions.

Their findings suggest that child-related gender inequality cannot be understood through the lens of biology. A more fruitful place for researchers to focus, according to the authors, is on the different ways that preferences, social norms, and culture impact men and women.

Does Biology Drive Child Penalties? Evidence from Biological and Adoptive Families appears in the June 2021 issue of the American Economic Review: Insights.