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Immigration, Parenthood and Child Penalties

In this paper I analyse the impact of a larger provision of domestic services on child penalties, focusing on the Spanish migration boom as an exceptional case study. The sudden supply shock in domestic and childcare services stemming from this event provides a unique quasi-experimental setting to examine whether the availability of affordable childcare and household services can reduce gender disparities and the penalties associated with parenthood. Using a novel individual-level measure of child penalty and a rich employer-employee administrative dataset, I find that the expansion of affordable domestic services driven by the inflow of female immigrant workers reduced the child penalties gender gap for native workers. The effect is persistent over time and more pronounced for relatively lower-skilled native women, suggesting that affordable substitutes for household production can help not only to alleviate gender gaps but also to reduce within-gender disparities.