The Motherhood Effect on Earnings amid Declining Fertility: Evidence from Korea

Jisoo Hwang and Inkyung Yoo

No 2557, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: Across developed countries, women's earnings decline sharply following childbirth while men's earnings remain unaffected. But how will the "motherhood effect" evolve as more women choose not to have children? We examine changes in the motherhood effect on earnings amid rising childlessness in South Korea, the country with the world's lowest fertility rate. Using an event study framework and administrative data covering the entire population, we find that earnings losses after childbirth have increased across recent cohorts of mothers. We provide suggestive evidence that the expansion of parental leave and a stronger positive selection into motherhood contributed to this trend.

Keywords: Motherhood effect; child penalty; selection into motherhood; parental leave (search for similar items in EconPapers)
JEL-codes: J13 J16 (search for similar items in EconPapers)
Date: 2025-08
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Persistent link: https://EconPapers.repec.org/RePEc:crm:wpaper:2557

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