Differences in Disadvantage

Abstract

Earnings inequality has grown in recent decades in the United States, yet research investigating the motherhood wage penalty has not fully considered how the penalty itself, and the mechanisms producing it, may vary among low-wage, middle-wage, and high-wage workers. Pooling data from the 1979 to 2004 waves of the NLSY and using simultaneous quantile regression methods with fixed effects, we test whether the size of the motherhood penalty differs across the distribution of white women’s earnings, and whether the mechanisms explaining this penalty vary by earnings level. Results show that having children inflicts the largest penalty on low-wage women, proportionately, although a significant motherhood penalty persists at all earnings levels. We also find that the mechanisms creating the motherhood penalty vary by earnings level. Family resources, work effort, and compensating differentials account for a greater portion of the penalty among low earners. Among highly paid women, by contrast, the motherhood penalty is significantly smaller and largely explained by lost human capital due to childbearing. Our findings show that estimates of average motherhood penalties obscure the compounded disadvantage mothers face at the bottom of the earnings distribution, as well as differences in the type and strength of mechanisms that produce the penalty.