Is There a Motherhood Wage Penalty for Highly Skilled Women?

Gafni Dalit () and Siniver Erez ()
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Gafni Dalit: School of Economics, College of Management, Rishon Letzion, Israel
Siniver Erez: College of Management, Academic Studies, Rishon Letzion, Israel

The B.E. Journal of Economic Analysis & Policy, 2015, vol. 15, issue 3, 1353-1380

Abstract: We use a unique data set of all individuals who graduated from universities in Israel during the period 1995–2008 in order to investigate the widening of the gender wage gap during the years following graduation. It is found that the main explanation is having children, rather than skills or academic background. The results show that each additional child reduces a woman’s wage by 6.6%, and increases a man’s wage by 3.4%. Furthermore, we examine three channels that may explain the motherhood penalty: periods of non-employment, a shift to the public sector and lower-paying firms and the timing of births. Having children increases a woman’s period of non-employment while decreasing a man’s, and each month of non-employment due to maternity leave reduces a woman’s wage by 1.0%, while non-employment reduces a man’s wage by only 0.6%. Mothers tend to shift from the private to the public sector and from higher-paying to lower-paying firms, which offer a more flexible and more convenient work environment, at the cost of a lower salary. Finally, a delay in having children increases a woman’s wage while having little, if any, effect on a man’s wage. Furthermore, controlling for this variable reduces the estimated motherhood penalty.

Keywords: motherhood wage gap; compensating wage differentials; wage differences (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1515/bejeap-2013-0191

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