The Motherhood Wage Penalty and Female Entrepreneurship

Tiantian Yang (), Aleksandra (Olenka) Kacperczyk () and Lucia Naldi ()
Additional contact information
Tiantian Yang: The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104
Aleksandra (Olenka) Kacperczyk: London Business School, Imperial College, London NW1 4SA, United Kingdom
Lucia Naldi: Jönköping International Business School, 553 18 Jönköping, Sweden

Organization Science, 2024, vol. 35, issue 1, 27-51

Abstract: The need to resolve work–family conflict has long been considered a central motive for women’s pursuit of entrepreneurship. In this paper, we propose and empirically uncover a novel mechanism driving female entrepreneurship: reduced earnings opportunities in wage employment due to motherhood status. Combining insights from career mobility research and the motherhood penalty literature, we propose that women who become mothers will disproportionately launch a new business to reduce the motherhood penalty they would otherwise incur in wage work due to employer discrimination. We further predict that this tendency to launch a new venture will be more pronounced for women who occupy high-paying or managerial positions, given the higher opportunity cost of staying in wage work and the higher potential payoffs from entrepreneurship that accrue mothers occupying such positions. Using matched employer–employee data from Sweden that distinguish new-venture founding from self-employment, we find support for our arguments. Overall, this study sheds light on the two antecedents of female entrepreneurship and contributes to a more thorough understanding of what motivates women to pursue irregular and atypical careers, such as entrepreneurship.

Keywords: motherhood wage penalty; entrepreneurship; career mobility; self-employment; venture creation; gender inequality (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/orsc.2023.1657 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:35:y:2024:i:1:p:27-51

Access Statistics for this article

More articles in Organization Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().