Having a child brings obvious new expenses – diapers, cribs, strollers and babysitters, to name a few. But for women, having children also has a noticeable effect on how much money they make.
It’s well-established that many working women with children tend to earn less than similar women without children. Call it the baby penalty. This isn’t a universal truth, though. Motherhood seems to provide a financial boost for some women. It’s a baby bonus.
You can use this calculator to see how – based on a statistical analysis by Columbia University researchers using Census data – having a baby affects a woman like you, or a woman with different characteristics.
What’s going on here? Actually, it’s a bit of a mystery, but experts have some ideas.
Economists have long argued that some of the disparity between men’s and women’s earnings – working women earn 79 cents for every dollar a man earns – is the result of the way children affect a mother’s career. Women often face a cultural expectation that they should bear the brunt of child-rearing duties, and for generations that’s meant that women with kids – even those who stay working – pay a penalty compared to women without kids.
“Increasingly, we’ve come to understand that a substantial portion of the gender gap in pay comes about from the effect of children on women’s wages,” says Jane Waldfogel, a professor of social work at Columbia who conducted the analysis with Ipshita Pal, a doctoral student, for a forthcoming paper with the Russell Sage Foundation.
The good news is that, on average, the baby penalty has shrunk in recent years. Working mothers used to earn 6 to 7 percent less than working nonmothers. But, likely in part due to policy changes like the Family and Medical Leave Act of 1993, that gap has shrunk to around 1 percent.
To calculate the impact of motherhood on wages, Waldfogel and Pal relied on annual Census Bureau surveys from 1968 to 2014, measuring the earnings of mothers and nonmothers. They controlled for age, ethnicity, industry, occupation, geographic location and a slew of other factors in an attempt to make fair comparisons between similar women.
It’s important to note that the comparisons only look at employed women. New mothers often quit their careers, sometimes permanently. But the researchers did not attempt to measure that impact. They specifically wanted to calculate the effect of having children on the earnings of working women. This is also why they excluded very young women from the analysis.
Waldfogel and Pal found that while the overall average between working mothers and nonmothers has closed, there were substantial differences among the women.
Most of the progress on the baby penalty has been made by white women, by married women and women who graduated from college. In some cases, married working women with children seem to be earning more than married working women without children (and this is after accounting for age).
“Honestly, we’re still trying to figure it out,” Waldfogel says. “Some of it has to be that married women are working more consistently throughout their lives. We’ve really had a change in social norms about women’s role in the family.”
It used to be that most women quit their jobs to have children, returning to employment only when the children were grown or at least in grade school, Waldfogel said. In the 1960s, only about 10 percent of first-time mothers were employed a year after they gave birth. These long breaks from the job market made it hard for women to have careers. When they returned to work, they were far behind their childless peers.
This led to more discrimination. Employers were wary of investing in female workers and putting them on the promotion track if they suspected that the women would soon quit to have a baby. Women themselves may have felt pressure to choose less lucrative but more flexible careers like nursing or teaching if they anticipated juggling the burden of raising children.
These days, it’s much more common for moms to keep their jobs, and return to work shortly after giving birth, Waldfogel says.
Researchers theorize that the baby penalty has narrowed the most for white women in part because they had the biggest penalty to begin with. Waldfogel and Pal estimate that working white mothers in the 1970s earned 12 percent less than working white nonmothers. For black and Hispanic women, the baby penalty has always been a bit smaller, hovering around 2 to 6 percent over the past 40 years.
One theory is that black women have always been more likely to work. Another is that many black and Hispanic women may have already been working jobs that offer more flexibility.
An important policy change
The Family and Medical Leave Act of 1993 (FMLA), which guarantees parents at companies with more than 50 workers three months of unpaid leave, was a milestone in gender equality because it forced many employers to become more family-friendly.
As a result, many more women could take time off to have a child and have a job waiting for them when they returned. The law also granted fathers some time off too, which may also help explain why the baby penalty has turned into a baby bonus for married women over the last 20 years.
“I think something’s got to be going on with the husbands,” Waldfogel says. “Arguably, the biggest change in the FMLA was actually paternity leave. Many women already had maternity leave, but here we had the expansion of paternity leave rights.”
The legislation of paternity leave was a sign that households were becoming a little more equitable. “We do know from time-use data that fathers have been spending more time with children,” Waldfogel says. “The gap is definitely narrowing.”
The baby penalty used to be largest for more-educated women because babies tended to derail their careers. Now, in a reversal, the baby penalty is largest for less educated women, particularly the unmarried. This lands on top of other struggles that these single working mothers tend to face, including lack of affordable childcare, and retail jobs that keep them always on call.
And even if husbands and partners still aren’t contributing equally to raising a child, they can offer support in other ways that make it easier for a mother to hold down a job. (If anything, fatherhood helps a man's earnings.)
The United States remains the only developed country that does not guarantee mothers paid time off after they have a baby. The FMLA only guarantees 12 weeks of unpaid leave (and it is only to the roughly 50 percent of working women who work at a company big enough to qualify). In contrast, Mexico offers new mothers 12 weeks of paid leave and the United Kingdom gives them up to 39 weeks at 90 percent pay.
[The best and worst countries to be a mother]
The lack of stronger family-friendly labor laws has already become an issue in the 2016 presidential race. The Democratic contenders each have their plans to enact paid leave laws. On the Republican side, Marco Rubio proposed giving a tax break to companies that provide paid maternity leave for their workers.
The culture around working mothers has changed dramatically in the past few decades. Many companies now tout family-friendly benefits like on-site childcare, generous leave policies and flexible hours in an attempt to attract talented women. Laws at the federal and state level would help extend these opportunities to all women (and men).
It will take more research to pin down all the contributing factors, from cultural changes to government policies, that helped shrink the baby penalty. But the important message from Waldfogel and Pal’s work is that opportunities have improved for many mothers.
“I think it’s an article of faith among many researchers that this family penalty is bigger and there’s no way it could have gotten better over time,” Waldfogel says. “The fact that it’s gotten smaller over time – and it’s actually gone for some groups – it’s amazing.”