The Parenthood Gap: Firms and Earnings Inequality after Kids

Rebecca Jack, Daniel Tannenbaum and Brenden Timpe
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Rebecca Jack: University of Nebraska-Lincoln
Daniel Tannenbaum: University of Nebraska-Lincoln
Brenden Timpe: University of Nebraska-Lincoln

No 25-412, Upjohn Working Papers from W.E. Upjohn Institute for Employment Research

Abstract: We document the dynamics of career paths around parenthood, capturing worker advancement within firms and across firms with differing pay rates. Using a new linkage between administrative data on U.S. workers’ fertility and labor market histories, we show that the parental earnings gap is partly explained by mothers transitioning to lower-paying firms. Firm downgrading is driven by parents who take an extended absence from the labor force. Mothers who move to lower-paying firms see improved job amenities but less generous fringe benefits. The firm’s contribution to the parental earnings gap rises over time and reaches one-third by the child’s 11th birthday.

Keywords: Parental earnings gap; employer-employee; fertility; lower-paying firms; reallocation (search for similar items in EconPapers)
JEL-codes: J13 J16 J22 J31 (search for similar items in EconPapers)
Date: 2025-01
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