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The Motherhood Wage Penalty: Sorting Versus Differential Pay

  • Petersen, Trond
  • Penner, Andrew
  • Hogsnes, Geir
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    The motherhood wage penalty is today probably the largest obstacle to progress in gender equality at work. Using matched employer-employee data from Norway (1980–97), a country with public policies that promote combining family and career, we investigate (a) whether the penalty arises from differential pay by employers or from sorting of employees on occupations and establishments, and (b) changes in the penalties over time in a period with major changes in family policies. The findings are as follows. (1) There are major wage penalties to motherhood, but these declined strongly over the 18–year period, likely caused by changes in family policies and in how families operate. (2) The penalty to motherhood is mostly due to sorting on occupations and occupation-establishment units. By 1995–97, mothers and nonmothers working in the same occupation-establishment unit were paid same wages. (3) Women who become mothers are wage wise positively selected, but the premia are wiped out by the negative effects of actual motherhood. (4) For wage growth, there were premia to motherhood in 1980–89, but none by 1990–97. In conclusion, the motherhood penalty is not due to employers paying mothers lower wages and its size appears sensitive to changes in family policies, with large reductions in penalties over time.

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    Paper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number qt9886p84f.

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    Date of creation: 01 Jun 2007
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    Handle: RePEc:cdl:indrel:qt9886p84f
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    1. Goux, Dominique & Maurin, Eric, 1999. "Persistence of Interindustry Wage Differentials: A Reexamination Using Matched Worker-Firm Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 492-533, July.
    2. Esping-Andersen, Gosta, 1999. "Social Foundations of Postindustrial Economies," OUP Catalogue, Oxford University Press, number 9780198742005, March.
    3. Dex, Shirley & Joshi, Heather, 1999. "Careers and Motherhood: Policies for Compatibility," Cambridge Journal of Economics, Oxford University Press, vol. 23(5), pages 641-59, September.
    4. Lundberg, Shelly & Rose, Elaina, 2000. "Parenthood and the earnings of married men and women," Labour Economics, Elsevier, vol. 7(6), pages 689-710, November.
    5. Davies, Rhys & Pierre, Gaelle, 2005. "The family gap in pay in Europe: a cross-country study," Labour Economics, Elsevier, vol. 12(4), pages 469-486, August.
    6. Gubta, Nabanita Datta & Smith, Nina, 2000. "Children and Career Interruptions: The Family Gap in Denmark," CLS Working Papers 00-3, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
    7. John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High Wage Workers and High Wage Firms," NBER Working Papers 4917, National Bureau of Economic Research, Inc.
    8. Helena Skyt Nielsen & Marianne Simonsen & Mette Verner, 2004. "Does the Gap in Family-friendly Policies Drive the Family Gap?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(4), pages 721-744, December.
    9. Gerrit Mueller & Erik Plug, 2006. "Estimating the Effect of Personality on Male and Female Earnings," ILR Review, Cornell University, ILR School, vol. 60(1), pages 3-22, October.
    10. Catalina Amuedo-Dorantes & Jean Kimmel, 2005. "“The Motherhood Wage Gap for Women in the United States: The Importance of College and Fertility Delay”," Review of Economics of the Household, Springer, vol. 3(1), pages 17-48, 09.
    11. Deborah J. Anderson & Melissa Binder & Kate Krause, 2002. "The Motherhood Wage Penalty: Which Mothers Pay It and Why?," American Economic Review, American Economic Association, vol. 92(2), pages 354-358, May.
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