This study estimates the effect of parental absence on the development of children in rural China. Although some previous studies have looked into the effect of parental absence on children's academic achievements, we investigate the effects of parental absence on both the cognitive and non‐cognitive skills of children. Our results show that parental absence during early child development mostly incurs negative effects on the academic achievement and non‐cognitive development of children. A child whose parents are both absent tends to have lower Chinese and mathematics test scores, lower self‐assessment on his/her behavior, and is less likely to be happy and satisfied. A gender difference is also observed in the effect of parental absence: girls suffer more from the effect of both parents being absent on their mathematics test scores than do boys.