Excerpts from abstract:
New parenthood causes large decreases in labor market incomes for mothers but not fathers, a stylized fact known as the “child penalty.” We use a simple household model combined with a comparison of child penalties in heterosexual non-adopting, heterosexual adopting, and same-sex couples to better understand what causes the child penalty. Our results largely rule out giving birth and comparative advantage within the household as mechanisms, leaving preferences and gender norms as the main explanations, although we cannot disentangle these last two mechanisms. Building on these results we also provide causal estimates of two policies aimed at reducing the child penalty. We find small and insignificant impacts of paternity leave use on the child penalty, but find a 25% reduction in the child penalty from a large Norwegian reform that expanded access to child care.