The Motherhood Wage Penalty: Which Mothers Pay It and Why?

Abstract

Studies of the motherhood wage penalty typically focus on the “pure” effect of children, holding all else equal. But as all parents know, the arrival of a child means that nothing stays the same. One change especially salient to labor economists is that many mothers exit the work force. Absences from the labor market are likely to reduce wages because general and firmspecific skills depreciate and workers lose rents associated with good job matches. Low-skilled workers may be less vulnerable to such earnings erosion, since they have less human capital and their wages reflect less rent. If so, these workers may escape a motherhood wage penalty. Conversely, we would expect highly skilled women to experience the largest penalties for exiting the labor force to care for their children.