Working Paper: NBER ID: w30176
Authors: Henrik Kleven
Abstract: This paper develops a new approach to estimating child penalties in labor market outcomes based on cross-sectional data and pseudo-event studies around child birth. The approach is applied to US data and validated against the state-of-the-art panel data approach. Child penalties can be accurately estimated using cross-sectional data, which are widely available and offer more statistical power than typical panel datasets. The approach allows for providing granular evidence on child penalties over time, across geography, and across demographic and cultural groups. Child penalties vary enormously across space: the employment penalty ranges from 12% in the Dakotas to 38% in Utah, while the earnings penalty ranges from 21% in Vermont to 61% in Utah. To investigate if this variation is driven by differences in gender norms, an epidemiological study of movers within the US and immigrants from abroad is presented. The child penalty for US movers is strongly related to the child penalty in their state of birth, adjusting for selection in their state of residence. Parents born in high-penalty states (such as Utah or Idaho) have much larger child penalties than those born in low-penalty states (such as the Dakotas or Hawaii), conditional on where they live. Similarly, the child penalty for foreign immigrants is strongly related to the child penalty in their country of birth. Immigrants born in high-penalty countries (such as Bangladesh, Mexico, or Switzerland) have much larger child penalties than immigrants born in low-penalty countries (such as China, Cuba, or Portugal). Evidence on cultural assimilation is also presented.
Keywords: child penalties; gender norms; labor market outcomes; cross-sectional data; pseudoevent studies
JEL Codes: J13; J16; J21; J22; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Child penalties in labor market outcomes (J79) | Employment penalties (J68) |
| Child penalties in labor market outcomes (J79) | Earnings penalties (J31) |
| Differences in gender norms and cultural contexts (F63) | Larger child penalties (J13) |
| Gender progressivity (J16) | Annual employment penalties (J63) |
| Gender progressivity (J16) | Weekly employment and earnings penalties (J31) |
| Child penalty for U.S. movers (J13) | Child penalty in their state of birth (J13) |
| 10 percentage point increase in employment penalty in a woman's state of birth (J79) | 6 percentage point increase in her current employment penalty (J79) |
| Foreign-born immigrants (F22) | Child penalties linked to their country of birth (J13) |
| 10 percentage point increase in employment penalty in country of birth (J79) | 5 percentage point increase in employment penalty for immigrants (J68) |
| Cultural assimilation (Z19) | Diminishing differences in child penalties for later generations (D15) |