Does motherhood have an impact on the wage gap?

By Kiara Abe

In many developed economies, the wage gap between men and women seems almost non-existent in the early stages of their careers. However, after the birth of the first child, this equality breaks down abruptly. This phenomenon is known as the “maternity penalty” and is one of the most persistent structural causes of gender inequality in the labor market.

The maternity penalty: a gap that opens and does not close

According to the study by Kleven et al. (2018), published in the American Economic Journal: Applied Economics, women who become mothers suffer an immediate 21% reduction in their earnings after the birth of their first child. This decline is not temporary: even after 10 years, mothers continue to earn considerably less than both childless women and men. For example, while childless women continue to increase their earnings year after year, mothers show a prolonged stagnation in their wage trajectory. One of the clearest indicators that the problem lies not in women's labor capacity, but in market structures and social expectations, is the fact that women who are not caregivers earn 96% of men's wages. This data reveals that when the “maternity” or “care” factor is eliminated, the gap is drastically reduced (Slaughter, 2016). Therefore, the so-called maternity penalty is not only a reflection of individual decisions, but the result of a labor system that directly penalizes the interruption or reduction of activity for reasons of care, predominantly assumed by women.

Looking beyond total income, Kleven and his team showed that mothers also face a drop in hours worked (-6.5%), in their labor participation rate (-13.4%) , and in hourly wages (-14.3%). In contrast, men do not suffer these penalties when they become fathers.

Is it cultural or economic?

The motherhood penalty does not occur in a vacuum. A subsequent study by Kleven et al. (2019), based on data from the International Social Survey Program, found a direct relation between the magnitude of the penalty and the proportion of people who believe that ❝a man's job is to earn money, and a woman's job is to take care of the household❞. In countries where this traditional belief is strongest, such as Germany or Austria, the motherhood penalty can exceed 50%. In contrast, in countries such as Denmark or Sweden, where these ideas are less common, the penalty is much lower, at around 20%.

This indicates that the labor market responds not only to economic variables but also to social norms that shape the decisions of employers, governments, and families, which are structures that reinforce inequality.

Microeconomics as a tool for change

From microeconomics, it is possible to design solutions that modify the incentives that perpetuate this inequality. One effective proposal is the implementation of mandatory and equitable parental leave for both parents, with pay financed by the state.

Why does it work?

1. Because it distributes caregiving tasks equally, allowing both men and women to take time off work when having a child.

2. Because it changes employer incentives: if men and women are equally “risky” in terms of maternity/paternity leave, the hiring bias disappears.

3. Because it changes social norms by making the father’s role both visible and normal.

4. And because it reduces the opportunity cost of maternity, allowing more women to remain in or return to the labor market, and therefore has less economic impact on women.

The Nordic countries already apply this model and have significantly lower gender wage gaps, along with high female labor participation rates.

Motherhood should not be a barrier to economic equality; in our society, it continues to be one of the most determining factors in the gender pay gap. The evidence shows it, and the solutions exist. Correcting the maternity penalty is an urgent task. Because when a woman has a child, her salary drops. But when a man has one, his salary and even his career prospects do not have that permanent impact. That double standard, rather than a personal choice, is a reflection of society's norms and culture. Being aware that parental leave is not only an issue of social justice, but also of labor efficiency, productivity, and inclusive growth, it can change our vision globally, and thus, implementing it would result in more equality and balance in the labor market.

References

Kleven, H., Landais, C., & Søgaard, J. E. (2019). Children and gender inequality: Evidence from Denmark. American Economic Journal: Applied Economics, 11(4), 181–209. https://doi.org/10.1257/app.20180010

Kleven, H., Landais, C., Posch, J., Steinhauer, A., & Zweimüller, J. (2019). Do family policies reduce gender inequality? Evidence from 60 years of policy experimentation. NBER Working Paper No. 28082. https://doi.org/10.3386/w28082

Australian Treasury. (2023). Reducing the gender pay gap. https://treasury.gov.au/sites/default/files/2023-03/p2023-372004.pdf

Slaughter, A. M. (2016). Unfinished business: Women men work family. Random House.