The Motherhood Penalty: Is It a Wage-Dependent Family Decision?

Abstract

Abstract Recent studies have shown that even highly skilled women suffer a motherhood wage penalty, resulting in reduced pay relative to childless women. We use a unique dataset of all Israeli women who graduated college or university during the period 1995–2008 and their husbands to investigate whether the motherhood penalty is the result of a household decision. Thus, we investigate whether the wage gap between husband and wife before they have children affects the decision of which spouse will be the main provider and which will have the main responsibility for childrearing. We find that the couple’s initial wage ratio does not affect this decision, since a woman almost always bears the opportunity cost of childrearing even if she has a much higher starting wage than her husband.