Identification of Child Penalties

Abstract

A large literature estimates child penalties using event studies by gender, normalizing by predicted earnings absent children and reporting the gender gap. I formalize the design's identification assumption: normalized parallel trend violations are equal across genders, which I term normalized triple differences (NTD). Under NTD, the conventional target, the gender gap in normalized effects, is not identified when parallel trends fails. However, the effect of parenthood on the gender earnings ratio is point identified. Using Israeli administrative data, I find that parenthood's share of gender inequality varies by age at first childbirth.