<p>Using census data from 2000 to 2015 and a pseudo-event study design, this paper estimates the magnitude, distribution, and trend of the motherhood penalty in China, while examining its relationship with the country’s declining fertility rates. The findings reveal that one-third of working women leave the labor market in the year they give birth, with the penalty persisting for over 8&#xa0;years. The magnitude of the penalty increased significantly during the study period across most provinces, and regions with larger increases in the penalty experienced sharper declines in fertility rates. A mover-based design analysis shows that when women migrate to provinces with higher motherhood penalties, their fertility rates drop significantly. This study contributes to the literature by applying a novel pseudo-event study approach to cross-sectional data, offering new insights into the interaction between labor market constraints and fertility decisions in a rapidly evolving socio-economic context.</p>