Do Parental Leaves Make the Motherhood Wage Penalty Worse?

We assess if and how motherhood wage penalties change in response to the design of parental leave regulations. Focusing on Germany, we compare sweeps of reforms inspired by opposite principles. One allowed for longer periods out of paid work in the 1990s, the other prompted quicker re-entry in the labour market in the late 2000s. These reforms may have first exacerbated and later mitigated wage losses for new mothers, albeit each component of leave schemes may trigger separate, and at times zero-sum, mechanisms. We rely on Socio-Economic Panel (SOEP) data and a difference-in-differences design. Focusing on first-time mothers, we find that motherhood wage penalties were substantial (around 20–30 per cent of pre-birth wages) and also changed little during the 1990s. As parental leave reform triggered longer time spent on leave coupled with better tenure accumulation, wage losses for mothers remained stable in this first period. Following parental leave reform in the late 2000s, instead, the wage prospects of first-time mothers improved, thanks in part to shorter work interruptions and increased work hours. We suggest that the nuts and bolts of leave schemes can be fine-tuned to reduce child penalties and, thus, gender wage disparities.

First-Birth Timing and the Motherhood Wage Gap in 140 Occupations

Is delayed fertility associated with a reduced motherhood wage gap in all occupations? Using multilevel models and data from the 2011–2015 American Community Survey, O*NET, and the Current Population Survey, I examine whether delayed fertility is associated with a reduced motherhood wage gap in 140 occupations. Delayed childbearing is one strategy women use to mitigate the motherhood wage penalty. Findings indicate that mothers in high-earning professional occupations experienced the largest wage penalties with early motherhood but also the largest premiums with delayed childbearing. Although delaying a first birth mitigated the motherhood wage penalty in high-wage occupations requiring extensive career preparation, the majority of women who worked in lower wage occupations with more limited human capital requirements experienced no economic benefit from older motherhood. These results challenge the broader narrative that most women can improve their long-term earnings and partly overcome the structural motherhood wage gap by delaying fertility.

Motherhood Wage Penalties in Latin America: The Significance of Labor Informality

revious research has established the presence of a motherhood wage penalty in many developed societies; however, whether mothers face similar disadvantages in developing countries remains underexplored. This article argues that different intervening factors emerge when considering mothers’ labor compensation in developing contexts. Labor informality, a key characteristic of labor markets in developing countries, could play a significant role in shaping the wage consequence of motherhood. Using microdata from 43 national household surveys conducted between 2000 and 2017, we analyze five Latin American countries: Argentina, Brazil, Chile, Mexico, and Peru. After accounting for selection into employment and human capital, we find that mothers receive lower wages than childless women in all five countries. The penalties are similar to those found in some developed countries, ranging from 12 percent in Brazil to 21 percent in Chile. Mothers’ higher likelihood to work in the informal sector accounts for part of the wage gap.

Compensating wage differentials and the labor market re-entry of mothers: Evidence from a factorial survey

Mothers still earn substantially less than women without children; this discrepancy is often referred to as the motherhood wage penalty. This paper examines one possible explanation for this penalty: the willingness to accept lower-paying jobs that have more favorable characteristics that help women reconcile family and work. This idea was formulated based on the theory of compensating wage differentials (CWDs). A factorial survey is used to empirically examine the willingness to accept lower-paying jobs. An online survey comprised 398 women who interrupted employment due to family reasons. The results suggest that mothers are willing to accept lower wages for better job characteristics and that in addition to wages, non-monetary characteristics are also important in shaping the re-entry decision.

Do parental leaves make the motherhood wage penalty worse? Assessing two decades of German reforms

Women-friendly policies may have perverse effects on the wages of employed women and mothers in particular. Yet few have addressed the causal impact of such policies and the mechanisms they might trigger at the individual level to produce such wage responses. We assess if and how two decades of reforms of parental leave schemes in Germany have shaped changes in the motherhood wage penalty over time. We compare two sweeps of reforms inspired by opposite principles, one allowing for longer periods out of paid work, the other prompting quicker re-entry in the labour market. We deploy panel data (G-SOEP 1985-2014) and a within-person difference-in-differences design. Motherhood wage penalties were found to be harsher than previously assessed in the 1990s. As parental leave reform triggered longer time spent on leave coupled with better tenure accumulation, wage losses for mothers remained stable in this first period. Conversely, we can no longer detect motherhood wage penalties for women affected by the later reform. Shorter career breaks and increased work hours may have benefited new mothers in the late 2000s, leading to a substantial improvement in their wage prospects.