Personal finance

Women experience a ‘motherhood penalty.’ For dads, there’s a wage ‘bonus’

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While the benefits of having children are shared between both parents, it is mothers who bear the brunt of the costs, according to a recent study published in the Proceedings of the National Academy of Sciences.

Despite women’s increasing levels of education and representation in senior leadership positions at work, women are still more likely than men to take time out of the labor force or reduce the number of hours worked because of caretaking responsibilities. Research shows some women also choose occupations that pay less but provide more flexibility to accommodate their family responsibilities.

Those caregiving demands have largely contributed to a persistent gender pay gap, often referred to as the “motherhood penalty.”

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“For mothers, employment and earnings conditional on being employed fall sharply around the time of birth for women, and, more ominously, may remain permanently lower well after childbirth,” the authors of the PNAS study wrote.

There is a dynamic that perpetuates itself, according to Jasmine Tucker, vice president of research at the National Women’s Law Center.

“If a kid is sick and someone needs to take time out of their workday, it’s going to be the woman because they are paid less,” Tucker said. “It makes more economic sense. It’s a self-fulfilling prophecy.”

Men do not face a “penalty” as parents at all. Alternatively, fathers who work full time experience a wage “bonus” when they have children, according to a separate report by the British trade union association TUC.

Fathers make roughly 20% more than men with no children, the report said.

‘Breadwinner’ moms still have a heavier load at home

But there’s another problem: Even when women outearn their husbands, they still pick up a heavier load when it comes to caregiving responsibilities, according to a separate Pew Research Center survey and analysis of government data.

“Even though there may be more egalitarian marriages, their duties at home have not been equalized,” Richard Fry, a senior researcher at Pew, told CNBC last spring. “The gender imbalance in time spent on caregiving persists, even in marriages where wives are the breadwinners.”

In fact, the motherhood penalty is even greater in “female-breadwinner” families, the PNAS study also found, where higher-earning women experience a 60% drop from their pre-childbirth earnings relative to their male partners. 

More hybrid jobs could help working moms

While the high cost of child care in the U.S. continues to weigh heavily on women’s labor force participation, shifting workplace dynamics may help, said Lauren Sanfilippo, senior investment strategist at Bank of America’s Chief Investment Office.

Coming out of the Covid-19 pandemic, many employees pushed back against return-to-office plans, resulting in a hybrid work model of three days a week in person that is now more the norm than the exception.

Office attendance has stabilized at 30% below where it was before the pandemic, according to a report by the McKinsey Global Institute.

That appears to be helping women stay in the labor force after having kids, other reports show.

“We’ll eventually see the motherhood penalty be tempered a bit by this hybrid work environment,” Sanfilippo said. “There’s a little bit more flexibility since the pandemic and that’s been a good thing.”

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