Child Penalty Estimation and Mothers' Age at First Birth

We show that the widespread approach to estimate the career costs of motherhood -- so-called “child penalties” -- is prone to produce biased results, as it pools first-time mothers of all ages without accounting for their differences in characteristics and outcomes. We propose a novel method building on the recent advances in the difference-in-differences literature to address this issue. Applied to German administrative data, our method yields 30 percent larger post-birth earnings losses than the conventional approach. We document meaningful effect heterogeneity by maternal age in both magnitude and interpretation, highlighting its key role in understanding the impact of motherhood.

Melentyeva, Valentina and Lukas Riedel (2025), Child Penalty Estimation and Mothers' Age at First Birth, Rockwool Foundation Discussion Paper.