In recent years, the birth rate in China has rapidly declined. While much research has been done on the penalties in earnings that women incur when they fall behind men in the labor market due to childbirth, there has been little to no research on the mental health effects. This study addresses the gap in current literature by examining the mental health penalties that women experience after having a child in comparison to men. We applied econometric modeling to data collected from China Family Panel Studies (CFPS) and found that women experienced a significant, immediate, and long-run decline (4.3%) in life satisfaction after their first child, while men were unaffected. We also found that women experienced a significant increase in depression after their first child. This suggests mental health penalties since the mental health risk proxied by these two measurements is only significant for women. This is likely related to child penalties in labor market performance and childbirth-related physical health issues. When countries adopt multiple tools to stimulate the birth rate for economic growth, they must consider the implicit burden on women—especially the long-term negative effects on mental health.