- Two life decisions crimp a young woman's earning power: going to college and having a family, according to a study.
- The researchers also said the earnings growth of college-educated men ages 25 to 40 was significantly higher than women's when both remained in the same industry throughout their careers.
Two life decisions crimp a young woman's earning power: going to college and having a family.
Compared to their male counterparts, women college graduates experience a gap in earnings growth — which is also dampened when women get married, according to a recent working paper published by the National Bureau of Economic Research.
The y-axis above shows the percentage of higher earnings when compared to that of a 25-year-old in the same group.
The researchers also found that the earnings growth of college-educated men ages 25 to 40 was significantly higher than women's when both remained in the same industry throughout their careers.
The earnings growth of college-educated women never approaches that of their male counterparts, but the gap is closer for those without a college degree.
That's despite the fact that those with a college education made 56 percent more on average than those with just a high school diploma, according to the Economic Policy Institute.
The gulf between the earnings growth of college-educated men and women narrows by 27 percent across industries, but still leaves a substantial gap that the researchers said is explained by the impact of marriage and children.
The negative impact of the earnings growth gap is felt most by college-educated married women.
"Most of the gap increase is driven by married women," said Sari Kerr, an economist at Wellesley College and one of the authors of the paper. "Unmarried women, in terms of data, look more like men."
Older millennial women who have delayed starting a family until they are more established in their careers may be reacting to this effect.
A recent Pew Research Center report found that 49 percent of Generation X women were mothers when they were ages 18 to 33 versus only 42 percent of millennial women in that range.
Though companies increasingly are expanding benefits to help workers have children, some employees may be reluctant to take advantage of these options, fearing resentment or losing their place on the career track.
In fact, more mothers with children under 18 are now in the workplace — 60 percent vs. 47 percent in 1975.
Kerr told CNBC that women who are further along in their careers are in a better position to negotiate their benefits when it comes to family leave.
Women who earn $75,000 or more take double the amount of maternity leave than women who make under $30,000, according to the Pew Research report.
"It's different if you're a highly valued employee than if you're on the bubble," Stewart Friedman, a Wharton School management professor, told CNBC. "It really matters what your position in the internal organization is and how much value you have."
Kerr added: "There are pros and cons to delaying pregnancy — I think the research is pretty good at showing that, in terms of your career, that waiting is beneficial in the long run."