The Child Penalty in Spain

Abstract

The role of parenthood in the gender pay gap has been extensively discussed in the literature. Using data from social security records, we adopt the methods used for other countries to evaluate the existence of a child penalty in Spain, looking at disparities for women and men across different labor outcomes following the birth of the first child. Our findings suggest that, the year after the first child is born, mothers’ annual earnings drop by 11 percent while men’s remain unaffected. The gender gap is even larger ten years after the birth. Our estimate of the long-run child penalty in earnings equals 28 percent, similar in magnitude to that found for Sweden and Denmark, and smaller than in the UK, the US, Germany, and Austria. In addition, we identify channels that may drive this phenomenon, including reductions in working days and shifts to part-time or fixed-term contracts. Finally, we encounter heterogeneous responses in earnings and labor market participation by educational level: college-educated women react to motherhood more on the intensive margin (working part-time), while non-college-educated women are relatively more likely to do so in the extensive margin (working fewer days).

Keywords: gender, labor supply, employment, wage differentials, parenting, education

JEL Classification: I24, J13, J16, J21, J22, J31