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The Gender Pay Gap May Never Be Bridged

Recent research shows that women take a big hit in terms of their earnings and career trajectory after having children.

PayScale’s most recent gender pay gap analysis showed that women make approximately 78 cents for every dollar their male counterparts earn. Recent research from Denmark helps us understand one big reason why: the earnings of mothers fall behind after they have their first child.

This “child penalty”, which lasts long after the birth of a first child, happens for three reasons:

  1. Mothers tend to not work after having children;
  2. When they do work, they work fewer hours than they did before having a child;
  3. After returning to work, their wage rate declines relative to fathers because they have different jobs and work at different organizations.

When all is said and done, mothers experience a 30 percent decline in earnings immediately following the birth of their first child, while fathers experience virtually no impact on how much they take home[1]. Even ten years after having a first child, women take home almost 20 percent less than what their male colleagues do. In practical terms, this means a mother of a ten-year old would earn $60,450, compared to $75,000 she would earn if she had been a father instead.

Women Tend to Not Work Once They Have Children

One of the reasons that mothers earn less after the birth of their first child is many of them leave the workforce, while men tend to continue to work at roughly the same rate they did prior to having children. This is true even in Denmark, a country known for family-friendly policies, including heavily subsidized child care and two weeks of fully paid paternity leave.

Do You Know What You're Worth?

These findings are in-line with PayScale’s recent research on career disruptions. We found that men are much less likely than women to be unemployed so that they can take care of children. This is especially true for those who have been unemployed for a year or longer: only 4 percent of men report caring for a child as their primary reason for unemployment as compared to 31 percent of women.

Returning Mothers Tend to Work Fewer Hours

When mothers do go back to work after having their first child, they tend to work fewer hours than they did before having children. The biggest dip in hours worked comes right after having a first child, but they never fully rebound: ten years after the birth of a first child, a mother still works almost 10 percent fewer hours than if she had not had children.

There is virtually no change in the number of hours fathers work. If we assume that fathers work a 40-hour work week, mothers work roughly 36 hours ten years after having a child.

Mothers Tend to Take Family-Friendly Jobs

It is no surprise that working reduced hours leads to lower earnings—and obviously leaving the workforce will put a significant dent in one’s pay—but why would a woman returning to work face a lower wage rate (i.e. lower hourly earnings) relative to a man?

Answer: the careers of fathers and mothers diverge after the birth of a first child.

Prior to having a first child, men and women have very similar positions and they are roughly equally likely to be top managers. While career progression slows down for both new mothers and fathers relative to workers without children, it slows down much more for mothers. In terms of being a top manager, men become much more likely to be a manager after becoming fathers, while there is no such change for women who become mothers.

Our research on the opportunity gap shows similar results. By mid-career (age range 30-44), men are 70 percent more likely to be in VP or C-suite roles than women, and by late career (age 45+), men are more 142 percent more likely to be in these higher paying roles.

Women also experience a decrease in their wage rate after the birth of their first child relative to if they had not had a child. If women go back to their previous jobs this should not be the case. Instead they tend to find new employers that are family friendly but offer lower pay. In Denmark, this means they tend to go to the public-sector or to firms with a high percentage of women with young children.

In the US, the vast majority of people think that women with children at home should not work full-time.

Why the Gender Pay Gap May Never Close

Mothers don’t want to earn less money, but societal pressures cause many to cut back on work or to leave the workforce entirely. Surveys find that in the US the vast majority of people think that women with children at home should not work full-time. Flouting these norms is no small ask. As Katherine Goldstein recently wrote in The New York Times, “Mothers are still regularly judged negatively by our employers and society for charging ahead professionally after we have children. It doesn’t take much to internalize that sexism to convince ourselves that our kids are better off with a mother who doesn’t have a demanding job…” In the worst cases, employers may even force women into career changes.

The societal pressure on women to step away from their careers when they have children, combined with the large pay penalties they face when they do so, means that the gender pay gap may never be bridged.

How do you feel about the gender pay gap and do you think there has been a “child penalty at your organization? We’d love to hear form you in the comments.

[1] This is after controlling for age and time.

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