The motherhood penalty: what is it and how can we combat it?
We know having kids costs money, but did you know that it actually reduces women’s earnings throughout their lives? Read on to learn about the motherhood penalty and what we can do to minimize it.
7 min read
After centuries of being sidelined—politically, financially, artistically, you name it—women have made major strides in the last couple of decades. And yet, despite all the progress, women’s wages still haven’t caught up to men’s.
Researchers are starting to identify a key factor that may play into this discrepancy: motherhood. Here, we’re diving deep into what experts call “the motherhood penalty,” so read on to learn what it is, why it exists, and what can be done to eliminate it.
What is the motherhood penalty?
Simply put, the motherhood penalty refers to the lost earnings of women who have children. Studies show that mothers can see their salaries drop by as much as 5% per child compared to women without children—and that’s just the tip of the iceberg.
Today, men out-earn women in every country on earth. Referred to as the gender wage gap or gender pay gap, estimates put the median earnings of women at 77 cents for every dollar men earn globally. Studies have also shown that the motherhood penalty makes up 80% of the gender pay gap.Yet when comparing mothers to fathers, parenthood doesn’t have an equivalent effect on men’s wages. Research consistently shows a steep decline in women’s wages after their first child, while men’s incomes stay relatively stable. In 2019, a study based on data from the United States Census showed that mothers earned just 71 cents for every dollar earned by fathers—an average loss of $16,000 per year!
There is virtually no dispute among experts that having children negatively impacts women’s careers and financial wellbeing. A 2019 study comparing the so-called “child penalties” across countries found that it was the largest in Germany, with mothers earning an astonishing 61% less on average than they did before giving birth. And while it was the lowest in Sweden (27%) and Denmark (21%), even these numbers represent a staggering amount of lost income, especially over the course of a lifetime.
Why does the motherhood penalty exist?
Having a child is no small task—and that’s putting it mildly. Pregnancy and childbirth are tremendously taxing on the body, and can take a long time to recover from—both physically and emotionally. What’s more, infants and young children need near-constant care—whether they’re breastfed or not—and some countries or workplaces don’t have generous maternity leave policies, or any at all. This forces women to make difficult decisions about going back to work, financing expensive childcare, and trying to balance their professional lives and early parenthood. Having multiple children, especially if they are close in age, makes it even more challenging to reenter the workforce. And the longer a woman stays home, even if she works part-time, the less optimistic her future prospects and earning potential become. That’s why the gender wage gap expands as women enter their peak childbearing years.
Though policies like paid family leave for both parents can help, the gender wage gap persists even in countries where these policies are in place. This may be due to the pressure on women to spend time with their children early on, or women’s own preferences to stay home during their child’s early years.
Even in countries like Denmark that have generous paid time off for new parents, many men still don't take advantage of their paid paternity leave. This may be due to outdated gender stereotypes, but the decision may also be practical. After all, women face a job market in which they earn roughly 20% less than their male partners. It follows that, for many families, the decision for the mother to take on most of the government paid leave is—at least in part—a financial one.
It’s worth noting that the child penalty also affects lesbian couples—though not to the same extent for each partner. Research from Norway suggests that, even in same-sex couples, the women who take on a larger role in child-rearing see a greater negative impact on their finances: The partner who gave birth had a 13% income drop, while her partner saw a 5% drop. The study saw no impact for male same-sex couples, and no data regarding gender-diverse people was included.
COVID-19’s devastating effects on mothers
In 2020 as the COVID-19 pandemic broke out and took hold, an estimated two million mothers exited the workforce. The tragedy of this can’t be overstated. Economist Michael Madowitz told the New York Times’s Jessica Grosse: “Just before the pandemic hit, for the first time ever—for a couple months—we had more women employed than men. And now, we are back to late 1980s levels of women in the labor force.” Not only does this leave us with a much less diverse workforce, but it may also have devastating repercussions for many women’s professional and financial futures. This period of lost work may harm their job prospects or even lead to old age poverty later in life. Furthermore, studies show that women who are not financially independent are more likely to remain in unhappy or even violent marriages.
And it doesn’t stop there. Most research suggests that women suffered more job losses due to the pandemic than men—and this is true worldwide. In March, the UN’s International Labor Organization estimated that labor force participation between 2019 and 2020 fell 1.8% for mothers with small children, but just 1% for men. And this impact has been especially felt by women of color. One thing that’s sure to contribute to this: women often take on the caretaking role at home when schools and daycares shut down.
All of this doesn’t paint a rosy picture for women’s financial prospects. According to the Global Gender Gap report, following COVID-19, the estimate for closing the global gender gap has increased by a generation from 99.5 years to 135.6 years.This means that, if current trends continue, it will take over 135 years to close the gender wage gap.
The care gap
In a 2020 interview, Francesca Donner, senior gender adviser to the secretary general of the UN, said this: “Our formal economy is only possible because it’s subsidized by women’s unpaid work. And so we have almost this black box over the home and everything that happens there has a zero dollar value on it.” According to the World Economic Forum’s Global 2022 Gender Gap Report, men spend just a third of the time women do on unpaid work. This includes childcare, eldercare, cooking, cleaning, household chores, bills, and the other essential work of running a household and raising a family—and it cuts across cultures and societies. Ipsos for UN Women researched the issue in 16 countries and found that women spent 31 hours each week on childcare during the pandemic, up from 26 hours pre-pandemic. Men, however, reported spending an extra four hours per week—from 20 hours up to 24.
The OECD Development Center said in 2014 that unpaid care work is the “missing link” when trying to understand the gender wage gap. But it’s not just unpaid care work that has fueled the care gap. Women—and particularly women of color—are more likely to work in the care sector, in jobs such as child and eldercare. Despite being physically and emotionally taxing, these professions aren’t often revered as they should be. And though the work is vital, these workers sometimes pay a high personal price—low pay, long hours, and limited upward mobility, both socially and financially.
What’s at stake when motherhood is penalized?
The motherhood penalty takes its biggest toll on mothers—from their financial independence to their mental health, and beyond. But it punishes everyone else as well. Diversity in the working world is better for decision-making, team morale, and even for companies’ bottom line. Children whose mothers want to work benefit from seeing them as equal players in the workforce. And for women who aren’t mothers, the motherhood penalty might make it seem like they can have kids or a career—but not both.
What can we do about the motherhood penalty?
Here’s the bright spot: So many things can be done to reach financial equality for mothers. There’s universal childcare, paid family leave for both parents (and required family leave for fathers), child tax credits or per-child monthly government payments, and guaranteed retirement benefits for mothers who have left their jobs to raise children—just to name a few. Companies need to step up, too, with more equitable salaries and benefits like flexible and remote work, extra paid time off, on-site childcare and nursing stations, and job security during and after parental leave.
What’s more, mothers need allies at home. Addressing the motherhood penalty is a responsibility that we all share, too—no matter our gender. As Gloria Steinham once said, "Women are not going to be equal outside the home until men are equal in it."
Just like any other form of discrimination, the gender wage gap and the motherhood penalty are about power, and who society decides is worthy of it. The good news is that, with enough willpower and initiative, it is possible to build a more equal world—for our kids and for ourselves.
The Mobile Bank
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