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The Effect of Motherhood on Wages and Wage Growth: Evidence for Australia

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Abstract

Labour market theory provides several reasons why mothers are likely to earn lower hourly wages than non-mothers. However, the size of any motherhood penalty is an empirical matter and the evidence for Australia is limited. This paper examines the effect of motherhood on Australian women’s wages and wage growth using a series of panel-data models which control for other relevant factors, both observed and unobserved. Using data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, an unexplained motherhood wage penalty of around four per cent for one child, and eight per cent for two or more children, is found. Further analysis suggests that the wage penalty emerges over time through reduced wage growth, rather than through an immediate wage decline after the birth of a child. This reduction in wage growth is consistent with discrimination but also with a reduction in mothers’ work effort.

Suggested Citation

  • Livermore, Tanya & Siminski, Peter & Rodgers, Joan, 2010. "The Effect of Motherhood on Wages and Wage Growth: Evidence for Australia," Economics Working Papers wp10-12, School of Economics, University of Wollongong, NSW, Australia.
  • Handle: RePEc:uow:depec1:wp10-12
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    File URL: http://www.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/doc/uow090526.pdf
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    References listed on IDEAS

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    1. 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, September.
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    Cited by:

    1. Tarja Viitanen, 2014. "The motherhood wage gap in the UK over the life cycle," Review of Economics of the Household, Springer, vol. 12(2), pages 259-276, June.
    2. Erik Lundquist & Hanna Eklööf, 2017. "The Motherhood Wage Penalty: A Varieties of Capitalism Approach," LIS Working papers 710, LIS Cross-National Data Center in Luxembourg.
    3. Nizalova, Olena Y. & Sliusarenko, Tamara & Shpak, Solomiya, 2016. "The motherhood wage penalty in times of transition," Journal of Comparative Economics, Elsevier, vol. 44(1), pages 56-75.
    4. Pritchett, Irina, 2015. "Wage Penalties for Motherhood and Child-rearing in Post-Soviet Russia," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205241, Agricultural and Applied Economics Association;Western Agricultural Economics Association.

    More about this item

    Keywords

    Motherhood Wage Penalty; Wage Growth; Fixed Effects;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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