Title: “Racial difference in child penalty, childcare preference and labour supply”, joint with Ellora Derenoncourt (Berkeley)

Abstract: We document substantial differences in child penalty between black and white mothers. Following the first childbirth, Black mothers experience about half reduction in earnings, employment, hours, and wage than white counterparts. These differences are not driven by marital status, household structure or prior wage level. To investigate whether heterogeneous preference can explain the racial difference, we develop a labour supply model in which mothers face a trade-off between childcare expenditure and parenting hours, with an individual-specific preference for childcare. To uncover structural parameters, we use GMM estimation with 2 instrumental variables (state-level variation in the minimum wage policy changes and in the incarceration law changes).

The CAGE-AMES Lunchtime Workshop will be held via Microsoft teams, the link is here.