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This paper identifies latent group structures in the effect of motherhood onemployment by employing the C-Lasso, a recently developed, purely data-drivenclassification method. Moreover, I assess how the introduction of the generousGerman parental benefit reform in 2007 affects the different cluster groups bytaking advantage of an identification strategy that combines the sharpregression discontinuity design and hypothesis testing of predicted employmentprobabilities. The C-Lasso approach enables heterogeneous employment effectsacross mothers, which are classified into an a priori unknown number of clustergroups, each with its own group-specific effect. Using novel Germanadministrative data, the C-Lasso identifies three different cluster groups pre-and post-reform. My findings reveal marked unobserved heterogeneity in maternalemployment and that the reform affects the identified cluster groups'employment patterns differently.

Identifying Latent Structures in Maternal Employment: Evidence on the German Parental Benefit Reform