Parental responses to child disability: Gender differences and relative earnings

Abstract

This study investigates how child disability affect parental labor supply using a difference-in-differences design and Taiwanese population-wide administrative data. The results show that child disability reduces mothers’ employment rate and annual earnings by 9% and 12%, respectively, and these impacts persist for at least ten years. In contrast, fathers’ labor supply remains largely unchanged. We also find that even when mothers were the primary earner, fathers’ labor market outcomes suffer less setbacks than mothers’. This suggests that beyond relative earnings, non-market factors such as differences in caregiving abilities and gender norms may contribute to these disparities. Additionally, our findings indicate that child disability increases mothers’ likelihood of seeking psychiatric care shortly after childbirth and decreases the family’s probability of having subsequent children.