Long-Term Effects of Recession on Parenthood Gender Inequality

Jinyoung Kim and Eunhye Kwak
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Eunhye Kwak: Korea Labor Institute

No 16055, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study identifies a new mechanism to account for the persistent gender differences in earnings after childbirth. Aside from women's voluntary wage cuts in pursuit of family-friendly job amenities, we claim that adverse labor market conditions at the time of childbearing widen the gender gap among parents. Employing the instrumental variable (IV) method against a large cross-sectional dataset from the US, we find that giving birth during a recession reduces mothers' earnings, whereas fathers remain mostly unaffected. The asymmetric impact of a recession at the time of childbirth persists for a long time and accounts for 30–40 percent of the after-childbirth gender gap in earnings. Unintended impacts of recession on parenthood gender gap leaves room for government intervention on women's career breaks.

Keywords: gender gap; recession; long-term effects; fertility; child penalty (search for similar items in EconPapers)
JEL-codes: E32 J13 J21 J31 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2023-04
New Economics Papers: this item is included in nep-gen and nep-lab
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