Childcare Gaps and the Child Penalty: Evidence from China in International Perspective

This paper estimates the child penalty on women's labor supply in China using seven waves of the China Family Panel Studies (CFPS) spanning 2010–2022. Employing an event study framework centered on first childbirth, I find that women's labor force participation falls by approximately 30 percentage points at birth and remains persistently depressed over the following decade. At roughly 54% of the pre-birth participation mean, China's long-run child penalty ranks among the highest in a nine-country cross-national comparison and is inversely associated with the availability of formal childcare for children under age three. Heterogeneity analysis reveals that college-educated women face a penalty approximately half the size of their less-educated counterparts, while differences across birth cohorts are statistically indistinguishable from zero. A null result for grandparent co-residence is interpreted as reflecting endogeneity: rather than preventing labor market exit, grandparents may move in partly in response to it. Together, these findings suggest that persistent maternal labor market penalties in China are driven less by short-run disruption than by structural gaps in childcare provision and workplace accommodation.