The Price of Motherhood

If you're a young couple considering a baby and thinking the woman will put her career on hold for awhile as a result, you'll want to read this piece. It details a new study that quantifies the price of motherhood (impact to the woman's income) for such a couple. Here are the details:

On average, Miller has found in a new paper, a woman in her 20s will increase her lifetime earnings by 10 percent if she delays the birth of her first child by a year. Part of that is because she'll earn higher wages—about 3 percent higher—for the rest of her life; the rest is because she'll work longer hours. For college-educated women, the effects are even bigger. For professional women, the effects are bigger yet—for these women, the wage hike is not 3 percent, but 4.7 percent.

So, if you have your first child at 24 instead of 25, you're giving up 10 percent of your lifetime earnings. The wage hit comes in two pieces. There's an immediate drop, followed by a slower rate of growth—right up to the day you retire. So, a 34-year-old woman with a 10-year-old child will (again on average) get smaller percentage raises on a smaller base salary than an otherwise identical woman with a 9-year-old. Each year of delayed childbirth compounds these benefits, at least for women in their 20s. Once you're in your 30s, there's far less reward for continued delay. Surprisingly, it appears that none of these effects are mitigated by the passage of family-leave laws.

Miller actually conducted a series of experiments. None by itself was conclusive, but here's what the article concludes:

Three imperfect experiments still don't add up to one perfect experiment, but when they all give the same result, we can start to embrace that result with some confidence. In this case, the result is that early motherhood is not only correlated with low wages; it actually causes them.

Personally, I don't have any thoughts on whether a couple should wait a year or not. I'm just presenting the information so that you can make an enlightened decision. In the end, if the couple can afford to have only one person working, I'd say it's probably best for the child to do so. However, I know there are a lot of people who aren't able to (or don't want to) do this.

Comments

[Duane Gran]

I don't have the citation handy, but I've read a few articles which point out another significant factor in the equation -- namely the loss of wages for women who return to the workforce after having a family. A woman who earns a six figure income will find that the workforce penalizes her harshly for choosing to have a family, which is a strange occupational hazard in our society.