The Motherhood Wage and Management Gap: The Policies That Work

by Michelle J. Budig

The persistent gender gap in earnings--among workers with equivalent qualifications and in similar jobs-- is attributable to parenthood. Or more specifically, the gap is due to the systematically lower earnings of mothers and higher earnings of fathers, among comparable workers.

Public policies that target the difficulties families face in balancing work and family responsibilities, as well as discrimination by employers by workers' parental status, may be the most effective at reducing the gender pay gap.

Managers:  Few Wives or Mothers

There is a relative absence of wives and mothers among managers and leaders of organizations. A report by the General Accounting Office demonstrated that, relative to men, women in management are younger and less educated.  This begs the question, where are the older, more educated and experienced, female managers? And why are they under-represented?

A generation ago we might have hypothesized this relative absence of more senior women was simply due to the lack of qualified and experienced women in potential pool of women managers. However, since the 1980s, these qualifications and experience differences between women and men have eroded, so much so that women now earn college degrees at higher rates than men.  If a lack of qualified candidates cannot explain the absence of experienced female managers, what can?

My research and that of others demonstrate that a significant portion of gender-based differences in employment, earnings, and experiences of discrimination are increasingly related to parenthood, and the greater struggles of mothers to balance careers and family demands.

Parenthood, Gender, and Employment

There are distinct gender differences in the family structures of managers in the GAO report.  Women managers are far less likely to be married overall, compared with male managers. This gap in marital rates ranges from 8 to 19 percentage points across industries, with an average gap of 15 percentage points.

Second, if we subtract the rates of parenthood among men from those among women, we would compute a Managerial Gender Parenthood Gap. Women managers are less likely to be mothers, and have smaller family sizes, relative to male managers. The parenthood gap ranges from 0 to 9 percentage points across industries, with an average gap of 6 percentage points.

The absence of mothers and the rise in childlessness among highly skilled women is also found in national data.   Childlessness has risen among American women since the 1970s, and particularly among highly educated women. In 2004, among college educated white women in their 40s, fully 27% were childless. Researchers estimate about 44% of this childlessness is voluntary, while 56% is due to age-related infertility. A major reason why women delay or forego motherhood is due to the perceived and experienced incompatibility between careers and motherhood.

High-achieving women are forgoing families at rates not observed among high-achieving men.

Gender Pay Gaps Among The Childless and Among Parents

Among the mothers who persist in management, their gender pay gap relative to fathers is far larger (ranging from 21% to 34%) than the gender pay gap among childless managers (17% to 24%) In the GAO report

This month, the shrinking gender gap among young childless workers captured national attention with the highly publicized study by James Chung, on the lack of a gender gap among childless workers. Chung shows that among 20-something unmarried, childless workers in urban areas, there is no gender pay gap. Moreover, in multiple instances in this unencumbered group, women out-earn men. These women are also largely unmarried.

Childless women earn 94 cents of a childless man's dollar; mothers earn only 60 cents.

While causality is complex, there is a strong empirical association between the gender gap (pay differences between women and men) and the family gap (pay differences between households with and without children). Economist Jane Waldfogel's research showed that just 40% to 50% of the gender gap can be explained by the impact of parental and marital status on men's and women's earnings. Moreover, Waldfogel  shows that while the gender pay gap has been decreasing, the pay gap related to parenthood is increasing. 

The Wage Penalty for Motherhood

Having children reduces women's earnings, even among workers with comparable qualifications, experience, work hours, and jobs-and is now well established in the social science literature. All women experience reduced earnings for each additional child they have. This penalty ranges in size from -15% per child among low-wage workers to about 4% per child among high-wage workers.

That mothers work less and may accept lower earnings for more family-friendly jobs explains part of the penalty experienced by low-wage workers, and that mothers have less experience, due to interruptions for childbearing, explains a part of the penalty for high-wage workers.

What lies behind this motherhood penalty that is unexplained by measurable characteristics of workers and jobs? One factor may be employer discrimination. It is difficult to obtain data on discrimination. However, evidence from experimental and audit studies support arguments of employer discrimination against mothers in callbacks for job applications, hiring decisions, wage offers, and promotions.  Stanford sociologist Shelley Correll's experimental research shows that, after reviewing resumes that differed only in noting parental status, subjects in an experiment systematically rated childless women and fathers significantly higher than mothers on competency, work commitment, promote-ability, and recommendations for hire. Most telling, Correll and colleagues found that raters gave mothers the lowest wage offers, averaging $13,000 lower than wage offers for fathers.

The Wage Bonus For Fatherhood

The motherhood penalty compares women against other women to see how children depress their wages. While it is well known that fathers earn more than mothers, new research is highlighting the importance of fatherhood among men in enhancing their wages. A portion of fathers' higher earnings can be explained:  fathers tend to work more hours; have more experience, and have higher ranking occupations, relative to childless men. But after we adjust for these differences, we still find a wage bonus for fatherhood, and one that increases with educational attainment. Men of all racial/ethnic groups receive a fatherhood bonus in annual earnings, and this bonus is greatest among white and Latino college graduates, whose wages, all else equal, are $4,000 to $5,000 higher than childless men.

Parenthood exacerbates gender inequality in American workplaces. Mothers lose while fathers gain from parenthood, and these penalties and bonuses are found beyond the differences between parents and childless persons in terms of hours worked, job experience, seniority, and a wide host of other relevant labor market characteristics.

Policy Implications

What kinds of policies might enable mothers to maintain employment, workplaces assist parents in balancing work and family demands, and reducing the gender gap in pay attributable to wage bonuses for fatherhood and wage penalties for motherhood?

In a study of 22 nations I've been conducting with colleagues, we've identified three key policies that are linked to smaller motherhood penalties:

1.  Universal Early Childhood Education for preschool children and increased availability of affordable, high-quality care for very young children reduces the motherhood wage penalty.

The wage penalty for motherhood dramatically declines with the availability of publicly funded childcare for infants under two years old. Whereas we observe motherhood penalties of over 6% per child in countries lacking such care, the motherhood penalty declines toward zero as the enrollment of children in publicly funded infant care approaches 40%.

2. Universal moderate length job-protected leave following the birth/adoption of a child.

In the US, The Family Medical Leave Act  (FMLA) was designed to provide short-term unpaid leave to new parents, as well as other family caregivers. But less than a majority of gainfully employed American workers are covered by this act, due to exemptions of employer types from the law. Of those employers covered by FMLA, researchers estimate only 54% to 77% are in compliance with the law.  FMLA needs to be extended to all workplaces and workers, and ideally should be longer than 12 weeks.

Cross-nationally, job-protected leaves range up to three years. Our research shows that countries with very short leaves and countries with very long leaves have the highest motherhood penalties. Job-protected leaves of roughly one year do the best at minimizing the wage penalty for motherhood. Obviously, this is far beyond what is currently offered by FMLA, but emphasizes the importance of such leave in minimizing gender inequality.

3.  Short-term paid Maternity and Paternity leave

Short-term paid maternity leave (6 to 12 weeks) reduces the likelihood that women will have to exit jobs to recover from childbirth, and increases their ability to return to the same employer upon re-entry. The ability to return to work with the same employer following the birth of a child greatly reduces the wage penalty for motherhood. The effects of paid leave reserved for fathers on the wage penalty for motherhood, cross-nationally are also dramatic. Our research shows that countries that offer non-transferable paid leave to fathers evidence significantly lower wage penalties to mothers.

Addressing workplace discrimination against mothers and those making use of family benefits.

Some American workplaces offer various work-family benefits designed to help parents manage work and family responsibilities, such as paid leave, flexible scheduling, flexible work location, part-time options, and childcare assistance. Yet these benefits vary in availability and usage across workplaces. Research finds that many employees are unaware of the benefits available, and many employees fear negative impacts on their careers for making use of such policies. Moreover, some research indicates that usage of these policies can exacerbate the motherhood wage penalty. Federal-level work-family policies could eliminate many of these problems with uneven access across workplaces to work-family assistance, and discrimination against those workers who make use of legally sanctioned work-family benefits.

To reduce the gender pay gap, public policies should target the difficulties families face in balancing work and family responsibilities, as well as discrimination by employers based on workers' parental status.

An expert in gender, work and family issues, and the motherhood wage gap, Michelle J. Budig is an Associate Professor of Sociology at Center for Public Policy Administration at University of Massachusetts, Amherst.  This text was adapted from testimony Budig presented to the U.S. Congressional Joint Economic Committee Hearing on September 28, 2010.