Download This PaperGender Wage Gap and Child Employment Penalty Across Countries
63 Pages Posted: 21 May 2020 Last revised: 26 Mar 2024
Date Written: December 20, 2023
Abstract
We employ twin birth as an instrument to estimate the effects of fertility on female employment using 103 censuses from 58 countries spanning three decades. We document a strong linear association between gender wage gaps and child employment penalties across countries. About 20–30 percent of the variation in child penalty can be explained by the gender wage gap. A reduction of one-percentage-point in the gender wage gap is associated with a 0.3–0.5 percentage-points decrease in the child employment penalty and a 0.7–1.5 percent decrease in the child employment penalty measured as a percentage change of each country’s female employment rate. The gender wage gap remains the single most important predictor of the child employment penalty conditional on macroeconomic and social factors, and the bias-adjusted lower bounds supports a causal interpretation of the association. Our finding is consistent with a substitution effect on the extensive margin in the neoclassical labor supply model.
Keywords: child penalty, female labor supply, gender wage gap, twin birth
JEL Classification: J13, J16, J18, J22
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