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The Parenthood Gap: Firms and Earnings Inequality after Kids

Author

Listed:
  • Rebecca Jack

    (University of Nebraska-Lincoln)

  • Daniel Tannenbaum

    (University of Nebraska-Lincoln)

  • Brenden Timpe

    (University of Nebraska-Lincoln)

Abstract

We document the dynamics of career paths around parenthood, capturing worker advancement within firms and across firms with differing pay rates. Using a new linkage between administrative data on U.S. workers’ fertility and labor market histories, we show that the parental earnings gap is partly explained by mothers transitioning to lower-paying firms. Firm downgrading is driven by parents who take an extended absence from the labor force. Mothers who move to lower-paying firms see improved job amenities but less generous fringe benefits. The firm’s contribution to the parental earnings gap rises over time and reaches one-third by the child’s 11th birthday.

Suggested Citation

  • Rebecca Jack & Daniel Tannenbaum & Brenden Timpe, 2025. "The Parenthood Gap: Firms and Earnings Inequality after Kids," Upjohn Working Papers 25-412, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:25-412
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    More about this item

    Keywords

    Parental earnings gap; employer-employee; fertility; lower-paying firms; reallocation;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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