Motherhood Wage Penalty Research Articles

Australian Parental Leave Policy, Employers' Cognitive Bias, and Mothers' Wages: Penalty or Premium?

ABSTRACTThis paper utilizes a natural experiment created by Australia's first national mandate for paid parental leave in 2011, to investigate employer‐side mechanisms in motherhood wage penalties. Drawing on literature on cognitive bias, we hypothesize that maternity leave taking behaviors could trigger employer discrimination. We test this proposition by comparing whether and how four types of leave‐taking behaviors affect the wage prospects of working mothers. Using fixed effect models with lagged dependent variables and nationally representative panel data, the Household Income and Labor Dynamics in Australia (HILDA) for the period 2005–2019, this study reveals that before the mandate, mothers who had to use unpaid leave due to ineligibility for employer‐funded leave suffered pay penalties. After the mandate, mothers who forwent paid leave received pay premiums. Our study contributes to debates about parental leave policy and gender discrimination in the labor market by indicating that employers interpret contrasting leave taking behaviors differently, and reward employees in accordance with what they believe maternity leave behaviors imply about working mothers' conformity to the “ideal worker” norm.

Can fertility decline help explain gender pay convergence?

Abstract Prior scholarship demonstrates that motherhood wage penalties and fatherhood wage premiums contribute to the gender pay gap. These analyses typically take a cross-sectional perspective, asking to what extent gender inequalities in the association between parenthood and wages can explain gender pay inequality for a given cohort or at a given moment in time. By contrast, explorations of gender pay convergence over time have tended to start at the firm’s door, testing the explanatory power of changes in men’s and women’s human capital and job characteristics and neglecting the contributions of fertility change. We bring these two strands of research together, asking to what extent declines 1980–2018 in US employees’ number of children can explain gender pay convergence over the same period. Using a descriptive decomposition and data from the Panel Study of Income Dynamics, we show that, in gross terms, fertility decline can explain almost one-quarter of gender pay convergence from 1980 to 2018. Even net of a host of controls for human capital and job characteristics, fertility decline explains 8 percent of the attenuation of the US gender pay gap 1980–2018—about half as much as changes in education and about a quarter as much as changes in full-time work experience and job tenure combined. Finally, we show that employees’ fertility decline was fastest in the 1980s and subsequently slowed; this, in conjunction with persistent gender differences in parenthood–wage associations, helps explain stalled progress toward gender pay parity.

American Rural–Nonrural Differences in Motherhood Wage Penalties

A rich body of literature has studied variances in motherhood wage penalties. Yet studies have not explored American rural–nonrural differences in this phenomenon. The spatial differences in women's experiences deserve exploration. Based on prior studies, rural mothers may experience greater wage penalties than nonrural mothers because of their high marriage rates, low educational levels, and the traditional gender attitudes and norms in rural communities. However, they may experience smaller penalties because rural job structures lack diversity and jobs there tend to be low‐paid. This paper uses fixed‐effects models to examine the rural–nonrural differences in motherhood wage penalties, with data from the National Longitudinal Survey of Youth (NLSY79). The results show that although rural women reported lower education levels and higher marriage rates than nonrural women, they experienced smaller motherhood wage penalties than nonrural women partially because they were more likely to work in low‐paid occupations and industries.

Research Note: New Evidence on the Motherhood Wage Penalty

U.S. women's age at first birth has increased substantially. Yet, little research has considered how this changing behavior may have affected the motherhood pay penalty, or the wage decrease with a child's arrival, experienced by the current generation. Using Rounds 1–19 of the National Longitudinal Survey of Youth 1997 (NLSY97), in this research note we examine shifts in hourly pay with childbirth for a cohort of women who became mothers mostly in the 2000s and 2010s. Results from fixed-effects models indicate that the motherhood pay penalty for NLSY97 women who had their first child before their late 20s is generally similar to that of previous cohorts. Those who became mothers near or after age 30, however, encounter a parenthood premium, as men do. The growing proportion of women delaying motherhood, coupled with the rising heterogeneity in motherhood wage outcomes by childbearing timing, contributes to a comparatively small motherhood penalty for this recent cohort. The pay advantage of “late mothers” cannot be explained by factors such as their labor market locations, number of children, stage of childrearing, marital status, or ethnoracial composition. Instead, the hourly gain stems from such mothers’ tendency to reduce working hours more than other mothers without experiencing a commensurate decrease in total pay. Unlike the fatherhood premium, the premium for late mothers does not lead to a real boost in income.

How Does Fertility Relaxation Policy Affect the Anticipation of Motherhood Wage Penalty

How Does Fertility Relaxation Policy Affect the Anticipation of Motherhood Wage Penalty

Is the Gender Wage Gap Really a Family Wage Gap in Disguise?

Despite large literatures on gender and family wage gaps (e.g., the motherhood wage penalty, fatherhood wage premium, and the marriage premium) and widespread recognition that the two gaps are intertwined, the extent and pattern of their relationships are underexplored. Using data from the 2018 Survey of Income and Program Participation, we show that family wage gaps are strongly associated with the gender wage gap, as long assumed in the literature, but with important caveats. The gender-differentiated wage returns to parenthood contribute 29 percent of the gender wage gap. One third of this is associated with occupation, but very little with other worker and job attributes. The gender-differentiated returns to marriage contribute another 33 percent, two thirds of which is associated with worker and job attributes but very little with occupation. However, 36 percent of the gender wage gap is unrelated to these family wage gaps, and the gender wage gap among childless workers remains substantial. Moreover, for Black and Hispanic workers, the pattern of association is more complex and generally weaker than for White workers. These results caution against focusing solely on the wage gap between “mothers and others” and suggest new directions for research.

From fatherhood premium to motherhood penalty: trends in the fertility effects on men's and women's wage in China (1989–2015)

Investigating the impact of fertility on the wage earnings of men and women and its trends is important for understanding and coping with both the widening gender wage gap and the continuously declining fertility rate in China. Through an in-depth analysis of China Health and Nutrition Survey data from 1989 to 2015, the study finds that in the late 1980s, fertility had a significant positive impact on the wage earnings of men in China, while the negative impact on women's wages was not significant. Over time, the fatherhood wage premium has been declining, while the motherhood wage penalty has been rising at a faster rate, and the gender wage gap has been widening. The expansion of the market sector in China since the deepening of reforms in 1992 is an important reason for the rapid increase of motherhood wage penalty.

Gendered Divergence in the Impact of Parenthood on Wages: The Role of Family Size, Human Capital and Working Time

While gender pay disparity is a frequently researched area, few have focused on how parenthood and family size impact the wages of mothers and fathers together. The purpose of this study is therefore to take a broader view of this pivotal topic, one which has continued relevance as governments and organisations seek to advance gender equality. The findings show clear gendered divergence in the impact of parenthood on wages, with ‘motherhood wage penalties’ and ‘fatherhood wage premiums’ in both annual and hourly wage. The widest gap in earnings between women and men occurs at three or more children even when human capital and labour market selectivity factors are controlled for. For women, the largest penalty occurs at one and three or more children while for men, having two children represents the peak point in terms of wage gains to parenthood. Accounting for working time through hourly wage estimations narrows but does not eliminate parental wage gaps, pointing to other factors such as occupational segregation.

Dynamic work trajectories and their interplay with family over the life course.

This review examines major bodies of literature, interrelated but usually considered separately, focused on work trajectories and their intersections with family dynamics through the life course. It begins with a consideration of the life course paradigm, which draws attention to the temporal dimensions of human lives, and recently developed analytic techniques that are well-suited to empirical investigation of life course transitions and trajectories over time. The review proceeds to examine empirical research on work career mobility (including both inter- and intra-generational mobility) measured as either trajectories of continuous outcomes or sequences of categorical outcomes, and their long-term consequences for socioeconomic attainment. Work-family trajectories are then addressed, focusing on the impacts of family on work, notably expressed in the motherhood wage penalty, and how family structure and processes affect long-term labor market outcomes. Research documents considerable heterogeneity in work-family dynamics over the life course across social groups with unequal resources. The review concludes with an assessment of the interplay of work and family trajectories studied longitudinally and makes recommendations for future research. It is argued that while extant studies of the work-family interface are compatible with, and sometimes deliberately reflect, a life course perspective, these bodies of research would benefit from more fully incorporating the life course principles of "agency" and "time and place".

Taking the long view: Long‐term couple earnings arrangements across the transition to parenthood

AbstractThis paper examines household earnings arrangements and parenthood. Previous research has shown that parenthood is associated with a motherhood wage penalty with women withdrawing from the labour market or reducing their work hours. But few studies have examined within‐couple relative earnings and breadwinning arrangements across the transition to parenthood. We identify three types of households—“female‐breadwinner households” (where women earn more than 60 per cent of the couple's annual labour income); “male‐breadwinner households” (where women earn less than 40 per cent of the joint income); and “equal‐earner households” (where women earn 40 per cent to 60 per cent of the joint income). Using longitudinal data from the Household Income and Labour Dynamics in Australia (HILDA) Survey and fixed effects models, we find a substantial decrease in the percentage of couples in equal‐earner households in the year prior to and after parenthood that is largely replaced by an increase in the percentage in male‐breadwinner households. We observe little return to pre‐parenthood earnings arrangements for equal‐earner and male‐breadwinner households. For female‐breadwinner households, we observe a gradual return to pre‐parenthood arrangements. These results provide evidence that parenthood is a major milestone contributing to gender inequality and highlight the importance of policies for reducing the impact of parenthood on women's earnings.

Childbearing Risk, Job Sectors, and the Motherhood Wage Penalty

Childbearing Risk, Job Sectors, and the Motherhood Wage Penalty

The Motherhood Wage Penalty and Female Entrepreneurship

The need to resolve work–family conflict has long been considered a central motive for women’s pursuit of entrepreneurship. In this paper, we propose and empirically uncover a novel mechanism driving female entrepreneurship: reduced earnings opportunities in wage employment due to motherhood status. Combining insights from career mobility research and the motherhood penalty literature, we propose that women who become mothers will disproportionately launch a new business to reduce the motherhood penalty they would otherwise incur in wage work due to employer discrimination. We further predict that this tendency to launch a new venture will be more pronounced for women who occupy high-paying or managerial positions, given the higher opportunity cost of staying in wage work and the higher potential payoffs from entrepreneurship that accrue mothers occupying such positions. Using matched employer–employee data from Sweden that distinguish new-venture founding from self-employment, we find support for our arguments. Overall, this study sheds light on the two antecedents of female entrepreneurship and contributes to a more thorough understanding of what motivates women to pursue irregular and atypical careers, such as entrepreneurship. Funding: This work was supported by the Ewing Marion Kauffman Foundation (Ewing Marion Kauffman Junior Faculty Fellowship) and the Wharton Dean’s Research Fund. Supplemental Material: The e-companion is available at https://doi.org/10.1287/orsc.2023.1657 .

The Effect of Motherhood on Wages: are women’s wage penalties due to lack of career aspirations?

ABSTRACT Mothers’ wages tend to be lower than those of equivalent childless women, and many researchers have reported on this ‘motherhood wage penalty’. We explore the relationship between pre-school children and their mothers’ wages to estimate the short-term effects of the ‘motherhood wage penalty’ and test the mechanisms of the ‘motherhood wage penalty’ in terms of changes in mothers’ mindsets. In addition, a novel instrumental variable was found. Based on data from the China Family Panel Studies, we find that children in China have a significant negative impact on the increase in mothers’ wages. The penalty is most severe for the low-income group. The reduction in mothers’ career enthusiasm after childbirth explains only 3.5% of the wage gap, suggesting that the wage penalty for mothers may come mainly from extrinsic factors. In addition, we find that grandparent care and the establishment of public childcare centres are effective in mitigating the ‘motherhood wage penalty’, and that delaying retirement may be detrimental to mothers’ wage increases.

Quantile regression estimands and models: revisiting the motherhood wage penalty debate

AbstractThis paper discusses the crucial but sometimes neglected differences between unconditional quantile regression (UQR) models and quantile treatment effects (QTE) models. We argue that there is a frequent mismatch between the aim of the quantile regression analysis and the quantitative toolkit used in much of the applied literature, including the motherhood wage penalty literature. This mismatch may result in wrong conclusions being drawn from the data, and in the end, misguided theories. In this paper, we clarify the crucial conceptual distinction between influences on quantiles of the overall distributions, which we term population-level influences, and individual-level QTEs. Further, we use data simulations to illustrate that various classes of quantile regression models may, in some instances, give entirely different conclusions (to different questions). Finally, we compare quantile regression estimates using real data examples, showing that UQR and QTE models differ sometimes but not always. Still, the conceptual and empirical distinctions between quantile regression models underline the need to match the correct model to the specific research questions. We conclude the paper with a few practical guidelines for researchers.

The Wage Penalty for Motherhood in Spain (2009-2017): The Role of the Male Partner’s Job Characteristic

Exploiting microdata from the Living Conditions Survey, and applying the coarsened exact matching algorithm to select a treatment and a control group of comparable women, we analyse the motherhood wage penalty in Spain from 2009 to 2017, with special attention to the effect of the male partner’s job characteristics. We find that mothers of children 0-3 years old suffered a penalty in their hourly wages of around 4.2%, which significantly increased when their partner was self-employed. Moreover, we only detect a wage penalty for high-educated women and for those who work in medium and large firms.

Do Stepmothers Pay a Wage Penalty?

There is an abundance of research on the motherhood wage penalty, but few studies have looked at stepmotherhood and its association with women’s work hours, labor market experience, and wages. Using the National Longitudinal Survey of Youth (1979–2016) this study presents results of descriptive statistics and fixed effects regressions. We find that married residential stepmotherhood is a relatively transitory experience. Further, the transition to parenthood was associated with a reduction in all women’s time at work, but was smaller for stepmothers and larger for biological mothers. Compared to married biological mothers, residential stepmothers spent more time at work, accumulated more labor market experience, and did not pay a motherhood wage penalty. These results broaden our understanding of how different pathways to motherhood may impact the nature of women’s relationships with their children, and in turn, other aspects of women’s lives including women’s work–family experiences.

The motherhood wage penalty in Turkey

AbstractWomen with children, on average, earn lower wages than those who do not have children. This is called the “motherhood wage penalty”. This study provides estimates of the wage penalty for working mothers in Turkey using the Turkish Household Labor Force Survey (HLFS), 2014–2018. The gross wage penalty is 21.3 percent, but it is entirely explained by human capital variables: education, marital status, and potential experience in the pooled cross-section. The bulk of the gross penalty is attributable to the higher educational attainment of the subsample of non-mothers compared to mothers. When the wage-setting mechanisms in the public versus private sectors, and differences in fertility exposure by age cohort conditional on education are accounted for, a clearer picture emerges. Empirical findings indicate that the wage penalty does not exist for mothers employed in the public sector but that there is a 3 percent penalty for mothers working in the private sector, with the highest value being 6.1 percent for university-educated young mothers. In addition, wage losses are higher for the younger age cohort, presumably due to leaves of absence from work for time spent caring for young children, which lead to skill erosion.

Parenthood and the gender wage gap in urban China

Using data from the Chinese Household Income Project survey and decomposition methods, this study explored the influence of parenthood on the gender wage gap in urban China in 2002 and 2018. Our findings showed that the employment rate is lower for women than men in both childless and with child groups, and the gender gap expanded from 2002 to 2018. The data revealed a parenthood wage penalty in 2002 and a parenthood wage premium in 2018. Moreover, the parenthood wage penalty was greater for women than for men and contributed to the formation of the gender wage gap. We also found that three components: motherhood wage penalty, fatherhood wage premium, and gender wage gap in the childless group contributed to the formation of the gender wage gap. From 2002–2018, the motherhood wage penalty decreased, whereas the fatherhood wage premium increased.

The Motherhood Penalty of Immigrants in France: Comparing the Motherhood Wage Penalty of Immigrants From Europe, the Maghreb, and Sub-Sahara With Native-Born French Women.

To date, relatively few studies analyzed the motherhood penalty as experienced by immigrant women. The principal objective of this research is to establish whether the negative effect of motherhood on wages is higher for immigrants than it is for the native population; and how this effect may vary across different immigrant regions of origin. Using data from the Enquête Revenus Fiscaux et Sociaux from 2009 to 2012 (INSEE, 2009–2012)1, a series of linear regression models were calculated to examine whether the effect of motherhood on wages differs for immigrant women and native women; and to what extent this effect varies across different immigrant origin groups. Specifically, this study explores the effect of motherhood on immigrant labor market integration in France from three regions of origin, as compared to native French women: immigrants from sub-Saharan Africa, the Maghreb (Algeria, Tunisia, and Morocco), and from European countries (each and every region of origin is considered separately in comparison to native French women). The results revealed substantial differences in the motherhood penalty between the different regions of origin and assert the existence of an especially pronounced motherhood penalty for mothers from the Maghreb. Given the gap in the research with regards to the cost of motherhood for immigrants in the labor market of the host country, this research sheds light on specific mechanisms influencing the integration patterns of immigrant women. Moreover, by choosing France, which is one of the main immigration destinations in Europe, and a country where the motherhood penalty for the native population is almost non-existent, this study provides a new perspective on the intersection of motherhood, immigration, and region of origin in the immigrants' labor-market integration process.

Do Parental Leaves Make the Motherhood Wage Penalty Worse?

Abstract We assess if and how motherhood wage penalties change in response to the design of parental leave regulations. Focusing on Germany, we compare sweeps of reforms inspired by opposite principles. One allowed for longer periods out of paid work in the 1990s, the other prompted quicker re-entry in the labour market in the late 2000s. These reforms may have first exacerbated and later mitigated wage losses for new mothers, albeit each component of leave schemes may trigger separate, and at times zero-sum, mechanisms. We rely on Socio-Economic Panel (SOEP) data and a difference-in-differences design. Focusing on first-time mothers, we find that motherhood wage penalties were substantial (around 20–30 per cent of pre-birth wages) and also changed little during the 1990s. As parental leave reform triggered longer time spent on leave coupled with better tenure accumulation, wage losses for mothers remained stable in this first period. Following parental leave reform in the late 2000s, instead, the wage prospects of first-time mothers improved, thanks in part to shorter work interruptions and increased work hours. We suggest that the nuts and bolts of leave schemes can be fine-tuned to reduce child penalties and, thus, gender wage disparities.