Compensation Issues

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One strategy to defend women from 'motherhood penalty' hits to pay

There is a way to curb the so-called "motherhood penalty," in which women’s earnings fall after having children, according to new research out of the University of Southern California.

In the United States, women in heterosexual couples see their income drop by about 40 percent when they become mothers, whether due to staying home to care for the newborn, shifting to part-time status or other reasons. On average, new fathers in heterosexual relationships experience no comparable decline.

USC economist Emily Nix, PhD, led a study based on data on earnings among heterosexual and same-sex female couples in Norway following the birth of their first child. In Norway, women in heterosexual couples saw their pay shrink by 20 percent on average. The drop lasted for at least five years. In same-sex couples, the birth mother’s income fell 13 percent after childbirth, along with a 5 percent drop for her partner. Within two years, the birth mother caught up with her partner. Within four years, the incomes of both mothers had fully recovered.

Employers may believe paternity leave policies would help reduce the hit to mothers’ earnings by supporting a more equitable division of parenting responsibilities and leave. Yet Dr. Nix found paternity leaves made no impact on the motherhood penalty. "If you want this to be your solution to the child penalty, it’s not working," she notes. 

What did make a difference is subsidized child care. When Norwegian parents in the study had access to high-quality care when their child was a toddler, that support curbed the reduction in earnings by 25 percent. The benefit, however, did not persist once child care stopped after age 3.

"These results suggest that if policymakers wish to decrease the child penalty, they should focus on providing better child care to families," the researchers wrote.

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