Children are bad for your career, unless you are a man

There is a persistent wage gap between men and women in most countries. This wage gap is driven by all kinds of factors, but arguably the most important one is that women tend to drop out of the labour market or reduce to part-time work once they have children. This has created a wage gap not only to men but also to childless women.

Researchers from the central bank of Spain analysed wage gaps between men and women, with and without children in 17 countries in Europe and North America. Interestingly, they also looked at the wage gaps at two different stages of the life cycle, at age 30, when parents typically have young children that require a lot of care, and at age 50 when many parents have older children and are better able to return to work.

The first chart that caught my eye was the wage gap between mothers and fathers at age 30 and age 50. For example, in the UK, a young mother aged 30 on average earns about 80% less than a young father of the same age.

Wage gap between mothers and fathers

Source: Guirola et al. (2024)

That huge wage gap is not due to discrimination by employers but simply because so many young mothers in the UK drop out of the labour force because they can’t afford to send their children to child care. Indeed, all the countries with a huge wage gap between mothers and fathers at age 30 have one thing in common: a lack of government subsidised childcare. In countries like France or Denmark affordable childcare is widely available which is why many women can remain in the labour force (at least working part-time).

And of course, the more women stay in the labour force, the more they contribute to the GDP and the better for GDP growth (I know, childcare is extremely valuable but if a mother does it for her child, it doesn’t count towards GDP, but if she hires a nanny to take care of her child it does).

Note also that by age 50 the age gap between mothers and father is still there, but it has become smaller since more women can go back to work. Indeed, for highly educated women, the wage gap tends to disappear at age 50 and above because they have an easier time getting back to work in well paid jobs.

Where is gets interesting is when we look at the wage gap between mothers and non-mothers. Women who have a child on average have lower earnings than childless women, again because they have to reduce employment or temporarily drop out of the labour market altogether. But by age 50, that wage gap between mothers and non-mothers has not only disappeared but turned into a premium for mothers vs. non-mothers. This premium seems to be mostly driven by an employment gap with mothers more likely to be in full-time employment at age 50 than non-mothers. Why this is the case, on the other hand, is not explained in the paper and I have many guesses, but no data to substantiate any of them.

Wage gap between mothers and non-mothers

Source: Guirola et al. (2024)

Finally, another interesting chart is to compare the wage gaps of non-father and fathers. Here, we see a father premium emerge where fathers tend to make more money than non-fathers both at age 30 and age 50. This wage gap increases at age 50 compared to age 30. Again, I am not sure what drives this, but I think disability and an inability to work or being in education and thus unable to support a family with children are key drivers of this wage gap.

What is striking though is that if you take these three charts together, you can see that having children is bad for the careers of mothers but has virtually no negative impact on the lifetime earnings of fathers.

Wage gap between non-fathers and fathers

Source: Guirola et al. (2024)