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This paper investigates how and when differences in work behaviour between men and women develop, focusing on the evolution of the gender gaps over the period of family development. The findings support the theory that gender differences in the formal labour market stem from the presence of children in the home and that childbirth and children entering school are critical times in women's employment. Births mark a dramatic decline in participation in work for women, while school entry is a time of considerable turnover in participation. The length of absence from work following a subsequent birth is closely related to whether the mother was in work between births, while maternity pay and leave entitlements appear to influence the precise timing of the return to work. In addition, a return to work following birth is often only temporary. The gradual decline in women's relative wages following the first birth appears to stem from the accumulation of several shorter periods of unusually low wage growth for women around the times of birth and school entry. There is also a sharp movement into part-time work for women following childbirth and a transition towards non-permanent positions and non-supervisory roles at both critical points.

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