Latest / Women at Work: Career, Leadership & Modern Work / How the Motherhood Penalty Costs Women Thousands
Transcript
- Lucas: Luna, I want to talk about something that hits a lot of women right in the middle of their careers — the moment they decide to have children. Luna: And the paycheck that suddenly doesn't stretch as far as it used to. Lucas: Exactly. There's actually a name for this in the research — it's called the motherhood penalty. And it's remarkably persistent. The classic study came from Budig and England back in 2001, and they found that for each child a woman has, her wages drop by about 7 percent. Luna: Seven percent per child. That's not a one-time hit either — it compounds over a career. Lucas: Right. So if you have two kids, you're looking at roughly a 14 percent penalty. And later studies have found similar numbers — between 5 and 10 percent per child. Meanwhile, men see a fatherhood bonus. Their earnings actually go up after becoming parents. Luna: It's almost like society rewards men for being dads and punishes women for being moms. But let's get into the why. What's driving that penalty? Lucas: There are three main mechanisms, according to the research. First, lost work experience. Women often take time off or reduce their hours after having kids, so they accumulate less tenure and miss out on raises and promotions. Luna: That's the human capital argument. But it only accounts for part of the gap. Lucas: Exactly. The second factor is reduced hours and productivity. Even when mothers stay in the workforce, they might shift to part-time or flexible roles that pay less. But again, the data shows that even controlling for hours, the penalty persists. Luna: So the third factor is bias. Employers assume mothers are less committed, less flexible, less competent. Lucas: And there's really good evidence for that. A famous study done by Shelley Correll and colleagues at Cornell sent out resumes that were identical except that one mentioned participation in a parent-teacher association. Those resumes got fewer callbacks and were rated as less competent. Luna: So just the signal of being a mother triggers a penalty. And it's worse for low-income women, by the way. The penalty is actually larger for women in lower-paying jobs. Lucas: Which makes it a compound problem. They can least afford the hit, but they take the biggest one. And the penalty also varies by race — it's larger for Black and Hispanic mothers than for white mothers. Luna: Let's talk about what can be done. On a policy level, paid family leave is a big one. Countries with generous leave policies show smaller penalties. Lucas: And on-ramp programs — those structured returns to work after a career break — can help. Some companies like Goldman Sachs and Morgan Stanley have had return-ship programs for years. Luna: But a lot of the burden falls on individual women, which isn't fair. What can a woman listening to this actually do? Lucas: One concrete thing: when you return from leave, explicitly negotiate your schedule and your responsibilities. Don't assume your employer will offer flexibility — you have to ask for it, and frame it around productivity. Luna: And if you can, stay visible. Come back to meetings, speak up on projects, make sure people see you as committed. That combats the bias. Lucas: You know, this show exists because listeners like you help us keep it going. We don't run ads — we're funded by a small group of listeners who chip in through buy me a coffee dot com slash fexingo. It's literally what pays for the research and production. Luna: And it allows us to dig into topics like this without worrying about sponsors. So if you find value in these conversations, consider joining that group. Lucas: Back to the motherhood penalty — I think one underappreciated point is that the penalty shrinks over time. Women who stay in the workforce eventually close the gap, but it can take a decade or more. Luna: So the advice to lean in — keep your foot on the gas — actually does help. But it's exhausting, and it shouldn't be necessary. Lucas: No, it shouldn't. And that's why structural changes matter. Things like paternity leave — when dads take leave, it normalizes caregiving and reduces the penalty for mothers. Luna: Sweden has had that for decades, and they've seen the gender wage gap shrink significantly. But even there, it's not gone. Lucas: What gives you hope? Is there any recent trend that suggests things might be getting better? Luna: I think the conversation itself is different now. Companies are more aware of unconscious bias. And some are actually measuring their promotion rates by parental status, which is a first step. Lucas: That's promising. Because you can't fix what you don't measure. And if you see that mothers in your firm are being passed over for promotion at twice the rate, you have to ask why. Luna: Exactly. So the message for today is: the motherhood penalty is real, it's measurable, and it's not your fault. But there are steps you can take to protect your career — and policies you can advocate for to make it easier for everyone. Lucas: We'll have more next week. Thanks for listening.