  This paper identifies latent group structures in the effect of motherhood on
employment by employing the C-Lasso, a recently developed, purely data-driven
classification method. Moreover, I assess how the introduction of the generous
German parental benefit reform in 2007 affects the different cluster groups by
taking advantage of an identification strategy that combines the sharp
regression discontinuity design and hypothesis testing of predicted employment
probabilities. The C-Lasso approach enables heterogeneous employment effects
across mothers, which are classified into an a priori unknown number of cluster
groups, each with its own group-specific effect. Using novel German
administrative data, the C-Lasso identifies three different cluster groups pre-
and post-reform. My findings reveal marked unobserved heterogeneity in maternal
employment and that the reform affects the identified cluster groups'
employment patterns differently.
