Motherhood and Labour Market Penalty: A Study on Indian Labour Market

The labour market penalty associated with motherhood is an important issue related to gender inequality in society. Our article is an attempt to empirically examine the extent of the ‘motherhood penalty’ in the context of the Indian labour market. We use longitudinal survey data from India to address this question. Using different measures of motherhood, we find that labour market outcomes are negatively associated with motherhood. But the result is the strongest for the measure that we define as fertility shock. This is measured by the difference between the actual and the desired number of children. We explain this result using a theoretical framework. In the theoretical framework, we argue that women’s decisions to join specific occupations or labour markets in general are often made by internalizing their desired number of children—the number they originally planned for. Hence, if we compare a woman’s number of children and the labour market outcomes between two periods—which we have done in our empirical strategy—we may not find any strong negative relationship as someone who wanted to have more children may have chosen a career path with a low-wage trajectory. We also examine how the extent of the motherhood penalty varies across different cultural values pertaining to different family settings, regions and workplaces. We find considerable heterogeneity in the motherhood penalty across different settings. Our results remain robust to alternative measures of motherhood.