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The motherhood wage penalty and non-working women

Author

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  • Xiaoyan Chen Youderian

    () (Xavier University)

Abstract

There is substantial evidence that women with children bear a wage penalty due to their motherhood status. This wage gap is usually estimated by comparing the wages of working mothers to childless women after controlling for human capital and individual characteristics. This method results in selection bias because non-working women are excluded from the sample. Using a model of fertility and working decisions, I examine how excluding non-working women affects the measurement of the motherhood wage penalty. The model shows that mothers face different reservation wages due to variance in non-labor income and preference for child care. Given the same non-labor income, a mother with a relatively high wage may choose not to work because of her strong preference for time with children. In contrast, a childless woman who is not working simply faces a relatively low wage. Thus, empirical analyses that focus only on employed women may overestimate the motherhood penalty.

Suggested Citation

  • Xiaoyan Chen Youderian, 2014. "The motherhood wage penalty and non-working women," Economics Bulletin, AccessEcon, vol. 34(2), pages 757-765.
  • Handle: RePEc:ebl:ecbull:eb-13-00870
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    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I2-P69.pdf
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    References listed on IDEAS

    as
    1. Shelley Phipps & Peter Burton & Lynn Lethbridge, 2001. "In and out of the labour market: long-term income consequences of child-related interruptions to women's paid work," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 411-429, May.
    2. Kenneth Troske & Alexandru Voicu, 2013. "The effect of the timing and spacing of births on the level of labor market involvement of married women," Empirical Economics, Springer, pages 483-521.
    3. Kenneth Troske & Alexandru Voicu, 2013. "The effect of the timing and spacing of births on the level of labor market involvement of married women," Empirical Economics, Springer, pages 483-521.
    4. Mette Ejrnæs & Astrid Kunze, 2013. "Work and Wage Dynamics around Childbirth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(3), pages 856-877, July.
    5. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    6. Elizabeth Ty Wilde & Lily Batchelder & David T. Ellwood, 2010. "The Mommy Track Divides: The Impact of Childbearing on Wages of Women of Differing Skill Levels," NBER Working Papers 16582, National Bureau of Economic Research, Inc.
    7. Amalia Miller, 2011. "The effects of motherhood timing on career path," Journal of Population Economics, Springer;European Society for Population Economics, pages 1071-1100.
    8. Troske, Kenneth R. & Voicu, Alexandru, 2010. "Joint estimation of sequential labor force participation and fertility decisions using Markov chain Monte Carlo techniques," Labour Economics, Elsevier, pages 150-169.
    9. Andres Erosa & Luisa Fuster & Diego Restuccia, 2002. "Fertility Decisions and Gender Differences in Labor Turnover, Employment, and Wages," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 856-891, October.
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    More about this item

    Keywords

    Child wage penalty; non-working women; labor supply;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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