Research Group on Human Capital Working Paper Series

(2019a), the authors use administrative data from Denmark, considered to be one of the most egalitarian countries in the world, and reveal that the earnings of mothers diminish considerably following the birth of their children, whereas men’s pay is not affected, leading to a long-run child penalty of 19.4%, ten years after the birth of the first child. [...] The estimated 𝛼$ coefficients measure the average effect of the arrival of a child on the parents’ outcomes and are expressed in relation to the outcome two years before the birth.5 The two remaining sets of terms include age and calendar age fixed effects. [...] In our comparison of mothers to fathers, the child penalty is defined as the difference in 𝑃 between women and men, and the long-run penalty is the one evaluated 10 years after the birth of the first child. [...] The pre and post earnings trajectories of mothers in the rest of Canada follow a parallel trend, and both sharply fall on the year of the birth, but slightly less so for births in the pre period (−47% compared to −51% in the post period). [...] Comparing the situation in Québec with that of the rest of Canada allows us to provide suggestive evidence on the effect of the subsidized childcare program (on top of that of the federal parental leave reform).