We examine how childcare inequalities in the home affect the work productivity of women, using unique data on the family structures of hedge fund managers, and the shock from school closures during the COVID-19 lockdowns. We show that funds with female managers miss out on a 7% excess return on average compared to male-only funds in the shock-month of school closures, providing a direct measure of the cost of unpaid care work. This cost increases with the proportion of mothers in the fund, especially mothers with young children. The performance of funds managed by fathers or women without children is not affected by school closures. 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 bear both the burden of unpaid care work, and its subsequent cost to their paid work.
When Paid Work Gives in to Unpaid Care Work: Evidence from the Hedge Fund Industry under COVID-19