Research Findings

Motherhood, Fatherhood, and Changes in Earnings

March 25, 2019

Women pay a wage penalty when they become mothers, earning about five percent less than equally qualified childless women.

Five percent may not seem like much, but over the course of their lives, mothers will lose well over $100,000 in wages – money that could have been spent on a modest home, their children’s college education, or over ten years of groceries.

This is bad news for those who care about mothers, children, and families.

In a recent study, I asked whether the wage penalty had declined over the past few decades. Are mothers’ lives—at least in terms of their earnings—improving? Are we, in fact, witnessing a trend toward equality? The answers were, unfortunately, mixed. Some have done better, and others have done worse.

I looked at changes in the motherhood wage penalty from the 1980s to today. I compared low-earning women who were working in jobs that paid just above the federal minimum wage to middle-earners, who took home about $17 per hour, and women at the top, who made close to $44 per hour or $92,000 per year.

My study also analyzed fathers, and I asked whether the fatherhood wage premium—the counterpart to the motherhood penalty—had changed over the past couple of decades in the United States.

I found that the motherhood wage penalty began to decrease in the 1990s, but the decrease was most substantial for high earners and smallest for low earners.

Mothers who had more to begin with fared better over the past couple of decades. Women who had less, even before they had children, continued to pay a substantial motherhood wage penalty. They made much less to begin with, and they paid a larger price for motherhood.

Today, high-earning women, or those who take home over $92,000 per year, no longer pay a motherhood penalty. But low earners, or those struggling to make ends meet on $15,000 per year, do.

These changes in mothers’ lives were complemented by a rising wage premium for fathers at the top of the earnings distribution. From the early 1980s to today, the fatherhood wage premium for high-earning men doubled, from five percent to ten percent.

Today, high-earning men, or those who make over $119,000 per year, earn a substantial fatherhood wage premium, and one that has risen since the 1980s.

These changes in the parenthood penalties and premiums fit with the story of rising inequality, which has been driven by gains at the top.

The level of income inequality today is higher than at any point in the past forty years. Occupations have become more polarized. Those at the top of the distribution have more resources, more flexibility, and more job security. These changes are pervasive and have touched nearly every facet of women’s and men’s lives.

Those in the upper echelons can tap into their financial resources when they have children. They can capitalize on greater autonomy and flexibility at work to deal with the stress of becoming a new parent.

Women can use their resources to remain more strongly attached to the labor market on the birth of a child. They can retain their job seniority. And they can continue to accrue important, job-related skills. All of these factors may help explain why the motherhood wage penalty has declined for high-earning women but not for low-earning women.

The results from my study provide good news for parents at the top but bad news for parents at the bottom. And they beg the question of what could be done.

Policymakers should focus increased attention on programs that could help parents who are already struggling to make ends meet. Subsidized childcare and paid parental leave, particularly for low-wage workers, could go a long way toward reducing inequality among parents and improving children’s lives.

Short of these changes, however, mothers and fathers at the top will, in all likelihood, continue to fare better, whereas those at the bottom will also, in all probability, continue to fall behind.

Read More

Rebecca Glauber, “Trends in the Motherhood Wage Penalty and Fatherhood Wage Premium for Low, Middle, and High Earners,” Demography 2018.

Image: via Flickr (CC by 2.0)

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