Natural Disasters and Employment in Parenthood: Evidence From Vietnam

ABSTRACT

This paper examines how exposure to natural disasters explains the magnitude of the motherhood employment penalty (so‐called child penalty) in Vietnam. First, we employ a pseudo‐event study design to estimate changes in employment around the birth of the first child, using population census data from 1989 to 2019. Combining the estimated child penalty with province‐level disaster records from EM‐DAT, we show that the motherhood employment penalty is larger in provinces that have experienced greater impact from disasters. Using cross‐sectional, first‐difference, and instrumental variable (IV) estimates at the provincial level, we find that exposure to disasters, measured by the number of people affected, homelessness, deaths and injuries, is a significant predictor of the child penalty. The regression results show that disaster exposure is positively associated with the child penalty, with a 1% increase corresponding to a 0.003–0.013 percentage point greater child penalty on average for ordinary least squares and first‐difference estimates and 0.014–0.041 percentage point greater child penalty for IV estimates. Better governance, public administration and digital infrastructure contribute to reducing the employment penalty.