Does the child penalty strike twice?

Gørtz, Mette, Sander, Sarah and Sevilla, Almudena ORCID: 0000-0001-6143-5903 (2025) Does the child penalty strike twice? European Economic Review, 172. ISSN 0014-2921

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Abstract

This paper compares the labor market trajectories of grandparents before and after the arrival of their first grandchild. We find gender gaps in earnings of 4 and 10 percent five and ten years, respectively, after the first grandchild. These effects are driven by changes in women's labor supply at both the intensive and extensive margin. We provide evidence from multiple data sources that grandmothers’ caregiving complements formal daycare, thereby offering essential flexibility for young parents. We document that grandchild penalties were larger in earlier periods characterized by low availability of daycare, shorter parental leave, and an earlier retirement age. Linking register data to geographical variations in daycare centers reveals that local daycare coverage is not associated with grandchild penalties. Detailed time use data show that grandmothers carry larger responsibilities for childcare than grandfathers. Recognizing the complementary nature of grandmaternal childcare is important for the design of policies attempting to reduce child penalties for both mothers and grandmothers.

Item Type:	Article
Additional Information:	© 2025 The Authors
Divisions:	Social Policy
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HQ The family. Marriage. Woman H Social Sciences > HD Industries. Land use. Labor
JEL classification:	J - Labor and Demographic Economics > J1 - Demographic Economics > J13 - Fertility; Family Planning; Child Care; Children; Youth J - Labor and Demographic Economics > J1 - Demographic Economics > J14 - Economics of the Elderly; Economics of the Handicapped J - Labor and Demographic Economics > J1 - Demographic Economics > J16 - Economics of Gender; Non-labor Discrimination J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J22 - Time Allocation and Labor Supply
Date Deposited:	14 Jan 2025 11:54
Last Modified:	15 Feb 2025 18:06
URI:	http://eprints.lse.ac.uk/id/eprint/126874

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