Unpacking the Child Penalty Using Personnel Data: How Promotion Practices Widen the Gender Pay Gap

Yoko Okuyama, Takeshi Murooka and Shintaro Yamaguchi

ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka

Abstract: We estimate the child penalty using detailed personnel records that allow decomposition into distinct pay components. The penalty initially arises from reductions in time-based pay after childbirth. Over time, job-rank-based pay becomes increasingly significant. These effects are interconnected: reduced working hours lead to lower performance evaluations, which subsequently limit promotion opportunities. Our model demonstrates that current promotion practices, which reward extended hours at entry-level positions, can generate production inefficiency. This finding suggests that addressing promotion practices could simultaneously reduce gender inequality and improve talent allocation, making a business case for organizational reform.

Date: 2026-06
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1314

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