Does motherhood hurt women’s pay?

In fact, it might be that women returning to work after childbirth can afford to relax, too. It is true that their immediate earnings are likely to fall, and perhaps infuriating that those of new fathers are not. Yet two new studies suggest that, in the long run, compared with women who do not have children, the motherhood penalty may vanish—or even turn into a premium.

The disparity between men and women who have children is well known. In a widely cited paper from 2019, Henrik Kleven of Princeton University, with co-authors, charted the careers of Danish parents after their first child was born. Mothers’ pay and working hours plunged, by a third and a fifth, respectively, in the first year after childbirth. Fathers’ careers continued roughly as before.

The same study found that mothers’ careers do not recover. After ten years, the hit to Danish mothers’ incomes was still 20 percentage points bigger than that to fathers’, with larger gaps between those with more children. This was down to women with children either leaving the labour market, working fewer hours or earning a lower hourly wage. The paper’s authors have repeated the exercise for 134 countries, with strikingly similar results.

But the difficulty in divining the effect of children is that the stork does not drop babies randomly. To get round this, the Danish paper was based on an “event study". This supposes mothers’ incomes develop along a smooth trend until they give birth, which causes the trend to break. After the break, each mother’s pay is compared with the trend (continued by other women in the sample who give birth later), and the drop is assumed to be the effect of the child. The same calculation is then carried out for fathers.

Such techniques are useful for pinpointing short-term effects, but work less well when trying to gauge what happens over the long run. Many things change over time for women with children and without, meaning that comparing mothers’ pay to a trend formed by women who have not yet given birth may distort the picture. Take a recent study by Simon Bensnes of Norway’s statistical agency, and co-authors, which shows that women tend to wait to have children until their earnings have started to flatten. In other words, part of the pay gap that opens up in event studies may simply be mama economica in action.

And so other researchers—including Mr Bensnes and colleagues—approximate randomisation differently, by looking at women undergoing in-vitro fertilisation (IVF). This has the advantage that all potential parents in the sample clearly wish to have a child, but those who succeed are decided by nature and chance. Several such studies have now considered parents from Nordic countries, where researchers can access sensitive data on IVF treatments and match them to administrative records.

The Norwegian study followed women undergoing IVF treatment for roughly a decade, finding that the annual incomes of those who gave birth fell by an average of 22% in the short term, compared with those who remained childless. In the long run, however, this penalty narrowed to just 3%. Fathers’ incomes did not drop; instead, they rose by around 10% over the long run.

A new Danish study considers a longer timeframe. Petter Lundborg of Lund University, along with co-authors, looked at up to 25 years’ worth of data from the point of each woman’s first IVF treatment. They found a similar pattern: a sharp short-term drop in mothers’ earnings, but no long-run earnings penalty compared with women who did not have children. In fact, their data reveal a small “motherhood premium" after about 15 years, which over a lifetime more than compensates for the initial drop.

Should such studies be trusted? The researchers are careful to point to the downsides of their own methodologies. As much as the success of IVF treatment sounds random, it may not be. In the Norwegian study, for example, the authors show that education levels are slightly higher for successfully treated mothers.

Meanwhile, unsuccessful IVF treatment is not harmless. Four researchers from Stanford University recently published a working paper that uses Swedish data. They, too, found no long-term motherhood penalty for women whose treatment succeeded. For those whose treatment did not, the results were disquieting: the women were almost 50% more likely to later take medicine for their mental health, and the couples had a higher chance of divorcing. Both motherhood and fatherhood premiums may thus be related to the suffering of those who remain childless.

Parents from outside Scandinavia may reasonably wonder whether all these results extend to them. Danish and Norwegian mothers’ incomes may recover particularly well because they have significantly better access to child care than those in many other countries. Nordic norms around gender equality could encourage fathers to play a bigger role in raising children, giving women more room to re-start their career.

As your columnist pondered such questions, he turned to Claudia Goldin, who won the Nobel prize for economics in 2023, for wisdom. She argues that the “parenthood gap" has three parts: the motherhood penalty, the fatherhood premium, and the cost of being female. The new studies suggest that the motherhood penalty narrows over the course of a career; the fatherhood premium is something of a mystery. But the cost of being female exists regardless of motherhood, and varies from place to place. Researchers have plenty of work ahead to quantify and explain these.

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