When Paid Work Gives in to Unpaid Care Work: Evidence from the Hedge Fund Industry under COVID-19

We examine how childcare inequalities in the home affect the work productivity of female talent, using unique data on the family structures of hedge fund managers, and the exogenous shock from school closures during the early Covid-19 pandemic response. We find that female managers’ ability to generate abnormal returns is curbed by 9% on average in the shock-month of school closures, providing a direct measure of the cost of unpaid care work. This effect is driven by mothers and especially mothers with young children. With increasing calls for more women representation in all layers of the economy and the efforts exerted towards that goal, there is reason for concern that these efforts might not factor in, as the pandemic has uncovered how women in general and
mothers in particular bear both the burden of unpaid care work, and the subsequent cost to their paid work.

Keywords: Hedge funds, COVID-19, Gender bias, Unpaid care work
JEL Classification: G11, G14, G23