Having kids is terrible for women’s earning power

Babies are cute. They’re soft, they often smell nice and—let’s face it—they’re necessary for the survival of the human race.

But for women, the arrival of a baby dovetails with a significant economic event: the moment when their earning power starts to lag their male peers’.

At the beginning of their careers, men’s and women’s income are practically equivalent. By the time everyone’s in their mid-40s, women on average make as little as 55% of what men do.

Claudia Goldin, an economics professor at Harvard University and an expert on the gender pay gap, said that most—but not all—of that difference can be traced to women working at least a little less than men do.

Or at least working less for pay: her research finds that women often pull back from their careers because their unpaid work—raising and caring for a child—becomes more demanding.

In a 15-year study of MBA students at the University of Chicago, Goldin and her colleagues found that the pay gap started to widen a year or two after a woman had her first child.

“These women are extraordinarily driven and dedicated to what they’re doing,” she said.

“They’re trying as hard as they can, but at some point, the demands of home are really getting to them.”

For its second season, Bloomberg’s award-winning podcast, The Pay Check, is taking an in-depth look at what happens to women’s careers when they have children, and what happens to the global economy if they decide not to.

Though about 70% of women work outside the home in the US, they’re also still doing a lot of work in the house. According to research from the Bureau of Labor Statistics, women spend more time on more days of the week caring for their children than men do.

They also spend more time on domestic duties such as cleaning and laundry.

Those additional responsibilities often lead women to limit the time they spend at their paying jobs. Sometimes that means switching to a part-time schedule. Other times, it’s more subtle—being unable to stay late on a moment’s notice, say, or an unwillingness to be on-call 24-7.

Women’s attempts to deal with these duelling demands are often mistaken for a lack of dedication or ambition in their careers. That perception also contributes to the gender pay gap, Goldin said. “The difference in hours is not that large,” she said. “But the penalties are very, very large.”

And, when women’s paycheques shrink in this way, the power dynamic with a partner or co-parent starts to change with it.

Within a couple, it makes financial sense for one professional parent to be available to work those long hours and reap the financial dividends, but that compounds the partner’s responsibilities at home. Usually, the professional parent winds up being a dad.

For women who don’t have kids, Goldin said, the gender pay gap is much smaller.

And for women who do, it starts to close as they near the ends of their careers, when their kids have left home or are more independent in general. But by that point, the damage to their lifetime earnings is well past done.

Read: How to claim time off under South Africa’s new paternity leave law

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Having kids is terrible for women’s earning power