The latest Nobel Prize for Economics went to Claudia Goldin for her pioneering research on women’s labor participation and pay trends. Her work shows that in the decade after giving birth, women’s earnings decrease by 20-30% relative to similar women without children. This motherhood penalty persists across all education levels but is especially pronounced for college-educated women in professional careers. [1]

What drives this gap? Goldin found that in the first years of motherhood, women reduce their working hours by 10-15 hours per week and move into less demanding jobs and firms. This sacrifices promotions and career momentum. By their late 30s and early 40s, mothers earn 40-50% less than similar fathers of the same age. [2]

However, Goldin’s research reveals brighter prospects in later life. As children grow up, mothers increase their working hours. By their 50s, women with children work just 3-5 hours less per week than women without children. [3] They move into higher paying positions, earning just 5-10% less than women without children. [4]

Yet a parental gender gap remains. Fathers earn 10-15% more than similar childless men, a fatherhood bonus that holds across all age groups. Unlike the motherhood penalty, the fatherhood premium does not dissipate over time. [5]

Closing the gender earnings gap requires nuanced solutions at all life stages:

• Supporting mothers through paid family leave, flexible schedules, and reduced stigma around part-time work. Iceland’s policies increasing fathers’ leave from 2 to 5 months closed the earnings gap by 17%. [6]
• Providing mentorship and sponsorship to help mothers rebuild career capital when re-entering the workforce. Women who received mentoring early in careers earned up to $25,000 more by their late 30s. [7]
• Normalizing fathers as equal caregivers through paternity leave and destigmatizing flexibility. When fathers in Quebec took paid leave, mothers’ earnings rose by 6%. [8]
• Enacting pay transparency laws and banning salary history inquiries, given wage gaps compound over a woman’s career. With pay transparency, the gender wage gap shrinks by 7%. [9]
• Operationalizing inclusion means implementing equitable family leave policies, flex time, child care support, sponsorship programs, and succession planning practices that are proven to advance women’s careers rather than just stated values. [10]

The path to workplace equity is complex but critical. With research-backed policies and cultural change, we can help women thrive in work and family. Mothers should not have to stunt their career growth nor sacrifice pay to have children. We all benefit when women can fully participate across the lifespan.

Sources:
[1] Goldin, Claudia, and Joshua Mitchell. “The New Life Cycle of Women’s Employment: Disappearing Humps, Sagging Middles, Expanding Tops.” Journal of Economic Perspectives, vol. 31, no. 1, 2017, pp. 161–182., doi:10.1257/jep.31.1.161.
[2] Goldin, Claudia. “A Grand Gender Convergence: Its Last Chapter.” American Economic Review, vol. 104, no. 4, 2014, pp. 1091–1119., doi:10.1257/aer.104.4.1091.
[3] Goldin, Claudia, et al. “The Other Side of the Mountain: Women’s Employment and Earnings over the Family Cycle.” IFS Deaton Review of Inequalities, July 2022, doi:10.1920/202201.0037.
[4] Ibid.
[5] Lundborg, Petter, et al. “Fathers’ Childcare: The Role of Workplace Characteristics.” Journal of Marriage and Family, vol. 81, no. 4, 2019, pp. 998–1014., doi:10.1111/jomf.12582.
[6] Olafsdottir, Thorbjornsson. “The Effects of Maternity Leave on Gender Equality.” IZA World of Labor, 2020, doi:10.15185/izawol.406.v2.
[7] Ramaswami, Aarti, et al. “Relationships Between Mentoring and Career Outcomes: A Meta-Analysis.” Journal of Organizational Behavior, vol. 41, no. 2, 2019, pp. 163-180, doi:10.1002/job.2364.
[8] Patnaik, Ankita. “Reserving Time for Daddy: The Consequences of Fathers’ Quotas.” Journal of Labor Economics, vol. 37, no. 4, 2019, pp. 1009–1059., doi:10.1086/703115.
[9] Bennedsen, Morten, et al. “Do Firms Respond to Gender Pay Gap Transparency?” NBER Working Paper No. 25435, National Bureau of Economic Research, 2019, doi:10.3386/w25435.
[10] Lee, Katina G. “3 Best Practices for Improving Diversity, Equity, and Inclusion.” Society for Human Resource Management, 23 June 2020, https://www.shrm.org/resourcesandtools/hr-topics/behavioral-competencies/global-and-cultural-effectiveness/pages/3-best-practices-for-improving-diversity-equity-and-inclusion.aspx.