Children and Gender Inequality: -0.2cm Evidence from DenmarkKleven: [email protected]; Landais: [email protected]; Søgaard: [email protected]. We thank Oriana Bandiera, Tim Besley, Raj Chetty, Marjorie McElroy, and Gilat Levy for helpful comments and discussions. 0.5cm

Despite considerable gender convergence over time, substantial gender inequality persists in all countries. Using Danish administrative data from 1980-2011, we show that most of the remaining gender inequality can be attributed to the dynamic effects of having children. The arrival of children leads to a long-run penalty in female earnings of 21% driven in roughly equal proportions by labor force participation, hours of work, and wage rates. Underlying this child penalty, we find clear dynamic effects of child birth on occupation, promotion to manager, and the family friendliness of the firm for women relative to men. The fraction of aggregate gender inequality that can be explained by children is strongly increasing over time— from 30% in 1980 to 80% in 2011—showing that non-child reasons for gender inequality have largely disappeared. Conditional on rich observables, the female child penalty in earnings is increasing in the relative skill of the female in the family, suggesting that mechanisms other than comparative advantage are at play. We probe into the potential role of “gender identity” effects by showing that the female child penalty is strongly related to the relative labor supply history of her parents. This is consistent with the notion that gender attitudes surrounding family and career are shaped in part by the environment in which individuals grow up. ∗Kleven: [email protected]; Landais: [email protected]; Søgaard: [email protected]. We thank Oriana Bandiera, Tim Besley, Raj Chetty, Marjorie McElroy, and Gilat Levy for helpful comments and discussions.