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Cost of Motherhood on Women’s Employment and Earnings

Employment

Cost of Motherhood on Women’s Employment and Earnings

Employment

New Mothers Experience Temporary Drop in Earnings

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When working women have children, they experience a permanent setback in their likelihood of working and a big but temporary drop in earnings.

New U.S. Census Bureau research shows that the share of women who are working falls by 18 percentage points in the quarter they give birth to their first child, as illustrated in the figure below.

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For women who only have one child, the rate of workforce participation remains at a lower level than before birth, but stabilizes. However, subsequent births decrease workforce participation further.

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The research used data from the Survey of Income and Program Participation (SIPP) matched to earnings data from the Longitudinal Employer Household Dynamics (LEHD) program.

For women who only have one child, the rate of workforce participation remains at a lower level than before birth, but stabilizes. However, subsequent births decrease workforce participation further.

 

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For mothers who continue to work, earnings fall by an average of $1,861 in the first quarter after birth relative to earnings pre-pregnancy or in early pregnancy (three quarters before the birth).

But earnings recover to pre-birth levels by the fifth quarter after birth, and rise by an average of $101 per quarter for the next six years.

While this recovery is encouraging, it is not large enough to return women to their pre-birth earnings path. There are no major differences in earnings between working mothers with just one child and those with multiple children.

 

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Most women who work in the year both before birth and after birth work for the same employer. Only 18% of women who go back to work within a year of having their first child switch employers when they return to the workforce. Women who work for larger, higher-paying employers are more likely to stay with those employers after childbirth.

Earnings grow at a very similar rate for women who return to pre-birth jobs and those who change employers within a year of giving birth.

Taking a short break from the labor force has only a temporary effect on earnings. Women who leave the labor force for at least one year after giving birth initially experience lower earnings when they return than those who take less time off. However, by the time the child is two years old, these women are on the same earnings path.

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Demographic Characteristics

Both employment and earnings after childbirth vary by the demographic characteristic of the mothers.

Compared to white women, non-Hispanic Black women face larger declines in labor force participation in the quarter of the first birth but are increasingly more likely to work as time passes.

Married mothers are less likely to work than women who had never been married at the time of the birth. Married mothers’ labor force participation was 4.1 percentage points lower than that of unmarried mothers in the quarter of the first birth and the gap between them increased to 9.4 percentage points six years after the birth.

Of those employed, older and married mothers earn less compared to their pre-birth earnings than their younger and unmarried counterparts. The earnings of more educated mothers fall less and recover faster than earnings of those with less education.

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Danielle H. Sandler is a senior economist in the Center for Economic Studies.

Nichole Szembrot is an economist in the Center for Enterprise Dissemination.

 

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This story was posted in: Employment


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