Motherhood and the allocation of talent

Abstract

In this paper we show that motherhood triggers changes in the allocation of talent in the labour market beyond the well-known effects on gender gaps in employment and earnings. Based on an event study approach around the birth of the first child and retrospective panel data for 28 European countries and Israel, we assess the labour market responses to motherhood across ‘talent’ groups–i.e. groups with different educational attainment, Math performance at age 10, and personality traits associated to entrepreneurial ability. We show that even the most talented women–both in absolute terms and relative to their husbands–leave the labour market or uptake part-time jobs after the birth of the first child. We also find that motherhood induces a negative selection of female talents into self-employment. Overall, our results suggest relevant changes in the allocation of talent associated to gender differences in non-market responsibilities that can have sizable impacts on aggregate market productivity.