Latest / Women at Work: Career, Leadership & Modern Work / How the Working Mother Tax Compounds Year After Year
Transcript
- Lucas: There's a number that I can't stop thinking about this week. The motherhood penalty — the earnings gap between women with children and women without — sits at roughly four percent per child, even after you control for education, experience, and hours worked. Luna: Four percent per child — so a woman with two kids is looking at an eight percent penalty just for being a mother? Lucas: Exactly. And that's the average across the board. The penalty is larger for women in lower-paying occupations and for women of color. A Black mother with two children can face a penalty closer to fifteen percent compounded over her career. Luna: Compounded is the key word. This isn't just a one-time hit when you come back from leave. It's like a tax that grows every year. Lucas: Right. The 2023 analysis from the National Women's Law Center tracked this across a fifteen-year window and found that the gap actually widens over time. Mothers fall behind on promotion cycles, they're more likely to be steered into staff roles instead of line roles, and they accumulate less tenure in high-growth positions. Luna: And part of that is the flexibility tax. Mothers are more likely to take part-time or flexible roles, and those roles pay a premium — actually, a discount — of about twenty percent per hour compared to full-time equivalent work. Lucas: That's the part-time premium in reverse. The Bureau of Labor Statistics data shows that part-time workers earn roughly twenty percent less per hour than full-time workers doing the same job. And mothers are overrepresented in part-time work — about one in four working mothers works part-time, compared to one in ten fathers. Luna: So you're paying for flexibility with lower hourly wages, fewer benefits, and slower career progression. And that's before you even factor in the time out of the workforce. Lucas: And here's where the compounding really hurts. A woman who takes a five-year career break — say, from age thirty to thirty-five — doesn't just lose five years of earnings. She loses the wage growth she would have gotten during those years, plus the compounding on that growth. A 2022 study from the Federal Reserve Bank of St. Louis estimated that a five-year break reduces lifetime earnings by about twenty percent. Luna: So the working mother tax is really a combination of things: lower starting pay after leave, slower promotion, more part-time work, and lost years of compounding. It's not one thing you can fix with a single policy. Lucas: Right. And policies like salary-history bans — which were supposed to prevent past discrimination from following you — have had mixed results. A 2021 study in Massachusetts found that the ban reduced the gender pay gap by about eight percent, but it barely moved the motherhood penalty because the penalty shows up after hire, not before. Luna: It's the everyday stuff. Being assigned fewer high-visibility projects, getting interrupted more in meetings, having your commitment questioned. A 2019 study in the American Sociological Review found that mothers are perceived as less competent and less committed than childless women, even when their performance is identical. Lucas: That perception gap translates into real dollars. The same study found that mothers were rated lower on performance evaluations and received smaller raises, all else being equal. And it's not just managers — coworkers also rate mothers lower on competence. Luna: So what can actually move the needle? I've seen some companies implement what they call 'motherhood-blind' promotion processes — where the committee doesn't see the candidate's parental status or leave history. Lucas: That helps, but it's hard to fully hide because gaps in employment history are visible. Some firms are experimenting with 'returnship' programs — paid internships for parents re-entering the workforce after a career break. Companies like Amazon and JPMorgan have had these for years, and the retention rates are decent — around seventy percent convert to full-time roles. Luna: But returnships are still small scale. They don't address the day-to-day penalty for mothers who never left. Lucas: Exactly. What would make a bigger difference is normalizing flexible work without a penalty. During the pandemic, when everyone was remote, some studies showed that the motherhood penalty actually narrowed because men were also at home. But as soon as offices reopened, the gap widened again. Luna: Because remote work became seen as a 'mom perk' again, not a standard arrangement. And mothers who stay remote get overlooked for promotions. Lucas: Right. A 2024 study from Stanford found that fully remote workers were promoted at half the rate of in-office workers, and the effect was twice as large for women with children. So remote work can be a double-edged sword. Luna: I want to shift to something practical. What can individual women do, given that systemic change is slow? Is there any evidence that negotiating for a compressed workweek — four ten-hour days, for example — helps? Lucas: There's some data. The same BLS data shows that compressed schedules don't carry the same hourly penalty as part-time work. But they're less common — only about three percent of workers use them. And you need a manager who's willing to be flexible. Luna: So it's still reliant on individual manager discretion. That's precarious. Lucas: It is. And that's why advocacy groups are pushing for systemic changes like paid family leave, subsidized childcare, and salary transparency. A 2025 study from the Institute for Women's Policy Research projected that universal paid leave could reduce the motherhood penalty by up to fifteen percent within a decade. Luna: That's meaningful, but fifteen percent still leaves a large gap. And it doesn't address the cultural bias. Lucas: No, it doesn't. The cultural piece is harder. It's about changing the assumption that commitment means face time, and that caregiving is a distraction rather than a skill. Luna: I think one thing that helps is simply naming the penalty. When women know this dynamic exists, they can at least factor it into their career decisions — choosing employers with track records of promoting mothers, or asking directly about promotion rates for part-time workers. Lucas: Speaking of choosing employers — a quick honest thing. A handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making this many episodes. If the show has helped you think through a career move or a negotiation, that's the only way it stays ad-free. Just putting it out there. Luna: Yeah, it's a small group that keeps this going, and we're grateful. It means we can keep digging into topics like this without any sponsor constraints. Lucas: Exactly. So back to the penalty — the other lever is manager education. Some companies are training managers to recognize their own bias around motherhood. A program at one large tech firm reduced the performance rating gap between mothers and non-mothers by about thirty percent in two years. Luna: Training can work, but it has to be ongoing. One-off workshops don't change behavior. Lucas: Agreed. The most effective programs include regular calibration sessions where managers review promotion decisions and flag any patterns. And they tie manager bonuses to diversity outcomes, including promotion rates for mothers. Luna: That's the kind of accountability that moves numbers. I'd love to see more companies publish their promotion rates broken down by parental status. Transparency forces action. Lucas: Some are starting to. But the motherhood penalty is stubborn because it's woven into so many systems — hiring, performance reviews, promotion, compensation. It's not one fix. Luna: It's a tax that compounds. Four percent per child, year after year, for a whole career. That adds up to hundreds of thousands of dollars in lost earnings over a lifetime. Lucas: And the first step toward closing that gap is acknowledging that the tax exists. Then we can start to dismantle it, piece by piece. Luna: Agreed. Thanks for digging into this, Lucas. Lucas: Thanks for the conversation, Luna. See you next time.