There is a large wage penalty for women with children relative to other women, and to men with children. Mothers earn between 15% and 40% less than women without children across low, middle, and high income countries, according to the International Labor Organisation (ILO). Women with two and especially three children experience even larger wage penalties, especially in higher income countries, as additional daughters in lower income countries can help with household and caring tasks enabling mothers to work for pay. Wage gaps are largest when mothers’ incomes are measured against fathers’ incomes. In fact, the gap between mothers and fathers with dependent children is the largest gender wage gap.
In the USA, median weekly earnings for mothers with children under 18 years are $US257 a week lower than the median for fathers with dependent children, according to the Bureau of Labor Statistics. A recent US study by Michelle Budig found that mothers earn 76 cents to a father’s dollar and that mothers on the lowest incomes experience the largest pay penalties. Budig concluded that, “the women who least can afford it pay the largest proportionate penalty for motherhood.” This wage penalty mounts over a lifetime. The lifetime earnings of mothers with one child are 28% lower than the earnings of childless women, and each additional child lowers lifetime earnings by another 3%, according to the Center for Retirement Research at Boston College. This same study found that mothers with one child receive 16% less in social security benefits than non-mothers, and each additional child reduces benefits by further 2%.As a result of the motherhood pay penalty, poverty is higher than it would be, our workplaces are not as productive as they might be, and economic growth is not as strong as it could be.
In the USA, 30% of female-headed families live below the poverty line and have five times the poverty rate of married couple families, according to a Pew Research Center study. With so many mothers unable to fully engage in the labor market, workplaces cannot attract and retain the best talent but have to draw from a limited pool of potential employees who can offer uninterrupted labor over long periods of time. As a result, economic growth is compromised as too many women with caring responsibilities are prevented from fully engaging in the labor force. For example, in the USA both female labor force participation (55.7%) and the proportion of the labor force who are women (45.8%) are declining. Reducing the motherhood pay penalty is a strategy that can simultaneously reduce within-country poverty and inequality, increase labor market productivity, and national economic growth.
Reducing the motherhood pay penalty is also necessary if countries are to reap the full returns on their substantial investments in girls’ education. As Ricardo Hausmann concluded following his 40 country study of gender gaps in education, “education is not a silver bullet – it is one important aspect of empowering women, but making the labor market compatible with marriage and motherhood remains a task to be completed in many countries.” Further, groundbreaking recent research by Kathleen McGinn, Mayra Ruiz Castro and Elizabeth Long Lingo found that daughters of employed mothers across 24 countries are more likely to be employed and earn higher wages than women whose mothers were home full time. Sons of employed mothers spend more time caring for family members than men whose mothers stayed home full time. The authors conclude that higher mother employment could gradually erode gender inequality in homes and labor markets over time.