Previous research has found that mothers earn less than childless women; this parenthood effect helps explain gender inequality as well. Although U.S. women’s educational levels and engagement in the labor market have changed over the last several decades, most studies do not analyze variation in the motherhood penalty over time. We know surprisingly little about how the labormarket status of mothers has evolved or whether the role of motherhood in shaping labor-market outcomes for women has changed over the last few decades. This paper uses data from the U.S. Panel Study of Income Dynamics (PSID), one of the only nationally representative datasets that contains a measure of actual labor-market experience, to examine the evolution of the motherhood penalty in recent years. We estimate the wage gap between mothers and childless women for three time periods: 1986-95, 1996-2004, and 2006-14. We find that the motherhood penalty remains quite stable over time, and may have worsened for mothers with one child. While the gross gap in pay between childless women and mothers of two or more children has narrowed, it has only done so because mothers’ have increased their investments in human capital, such as education and workforce experience. Differential selection into motherhood does not explain these findings, as fixed effects models provide similar results. Our findings may thus confirm that changes mothers can make – in their human capital investment, as well as in their employment patterns – may not be enough to create real change. Policies aimed at supporting mothers’ employment may be a necessary next step, if we hope to lower the motherhood wage penalty in the United States.
-reprinted from Washington Centre for Equitable Growth