Can the Child Penalty Be Reduced? Evaluating Multiple Policy Interventions
Martin Eckhoff Andresen, University of Oslo
Children cause large reductions in earnings for mothers but not fathers, a stylized fact known as the “child penalty” that explains a substantial portion of remaining gender income gaps. Can policy reduce the child penalty? We first document changes in the child penalty over the past 45 years in Norway. Next, we evaluate two possible interventions that may have played roles in more recent reductions in child penalties: paternity leave and high-quality childcare. We find no impact of paternity leave on child penalties or a measure of fathers’ preferences for childcare. In contrast, a year of publicly provided childcare reduces child penalties by 23% during the years of use. These results suggest governments can act to reduce child penalties, but providing alternatives to the mother’s time, such as quality childcare, is more effective than paternity leave.
(with Emily Nix)
Martin Eckhoff Andresen is a tenure-track associate professor at the Department of Economics, University of Oslo. His research interests include family and labor economics, economics of education and applied econometrics.