The Labor Market Impacts of Motherhood in China

This paper estimates the labor market impacts of parenthood in China. We find that becoming a mother has negative impacts on women’s labor outcomes. But the impacts are smaller and recover sooner than what have been found in other countries. A decomposition exercise suggests that parenthood plays a limited role in explaining the large gender inequality in China’s labor market. We document a form of inter-generational arrangement that is prevalent among Chinese families: Upon the arrival of a child, grandmothers substantially reduce market labor supply and provide much of the childcare. Grandparents’ help in childcare plays an important role in alleviating the motherhood effect on women. Suggestive evidence indicates that in return, grandparents who help with childcare receive more intra-family transfers and report higher subjective wellbeing. We further show that the motherhood effect, though relatively small, has increased substantially over the past decades. The rising gender gap in the labor market, the declining state sector that historically provides more flexible accommodations for working mothers, and the abolishment of the One-Child Policy all suggest a rising burden of motherhood on labor market outcomes