It is a persistent fact that — across time and across countries — women earn less money than men. This is true in the United States (where women earn about 79 percent of what men do). It is true in Japan (women there earn 73 percent of what a man does). It is true in Denmark (which has a 15 percent wage gap). Look across the world and you won't find a country where men and women have equal earnings.
The big debate in this space isn't whether a gender wage gap exists — it's why the gap exists. Some think the wage gap is the result of gender discrimination, an economy that doesn't believe women can perform as well as men. Others point to women selecting into certain fields that pay less — while still others cite gaps in the types of education men and women pursue.
An important new study makes a compelling case for another explanation: The gender wage gap is mostly a penalty for bearing children.
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The research comes from Henrik Kleven, an economist at Princeton University. He uses data from a country with one of the world's most robust social safety nets: Denmark. This is a country that offers new parents an entire year of paid leave after the birth of a child. The government offers public nursery care for children under 3 at the equivalent of $737 a month— a fraction of typical costs in the United States.
Yet Denmark has a gender wage gap nearly the same size as that of the United States, a country where women are not guaranteed paid maternity leave and child care increasingly costs more than rent. How does that happen?