Women are less likely than men to start firms and female entrepreneurs are less

likely to succeed. This paper studies the effect of childbirth on women’s entrepreneurial activity. Drawing on rich administrative data from Canada and an

event study and instrumental variable design, I show that children have substantial

negative effects on both founding rates and start-up performance, accounting for

a large portion of the gender gap in entrepreneurship. The effects are permanent:

entrepreneurial outcomes never recover to their pre-birth levels. These results are

not fully explained by household specialization based on labor market advantage.

Childcare availability and belonging to a culture with progressive gender norms

reduce the adverse effect of childbirth on the entrepreneurship gap.