Closing The Gap

Women's earnings drop after having a child—but men's do not

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Today, men out-earn women in every country on earth. Economists estimate that the U.S. gender pay gap — the gap between the median salaries of all working men and women in the U.S. — is about 80 cents earned by women for every dollar earned by a man.

Many factors drive the gender pay gap, but one of the most common explanations is the so-called "motherhood penalty," or the way that women's earnings are negatively impacted by raising children, while men's earnings are not. According to an analysis of Census data by the non-profit National Women's Law Center, mothers in the U.S. are paid 71 cents for every $1 fathers make — about $16,000 a year in lost wages.

Here's why the motherhood penalty exists and how it impacts women and their families:

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Many economists explain that this motherhood penalty occurs because women are still expected to do a majority of the work to raise and take care of children. These social rules may force women to prioritize taking care of their families over pursuing high-paying careers.

"Women are more likely to take jobs that have one or two very important amenities for people who are trying to rear families, and one of those amenities is flexibility in work time. And another is less than all-out hours of work," Gary Burtless, senior fellow of economic studies at The Brookings Institution, tells CNBC Make It.

"The largest single factor [of the pay gap] is that women, relative to men in couples with kids, often take a bit of a backseat so that their jobs are more able to be on-call at home, and so that guys' jobs are more able to be on-call in the office," Claudia Goldin, professor of economics at Harvard University explained to CNBC Make It in a previous interview.

"That doesn't mean that they're working different number of hours, that doesn't mean that their skill level is different, it just means that two people who graduated from Harvard Law School, they both take jobs at big law firms in New York, they have kids, one of them has to slow down a bit."

Many gender equality advocates believe public policies like paid parental leave and public child care could help relieve some of the negative impact that motherhood has on women's earnings, but new research finds that women's earnings are still negatively impacted by having kids in countries where these policies exist.

A study from the National Bureau of Economic Research analyzes how women's earnings are impacted by having children in Denmark, a country that, as noted by Vox, offers public nursery care for children under 3 for $737 a month, about $8,844 per year. According to MarketWatch, Americans spend between $9,000 and $9,600 per child per year.

The study's lead author, Henrik Kleven, professor of economics and public affairs at Princeton University, found that even in Denmark, "the arrival of children creates a gender gap in earnings of around 20% in the long run, driven in roughly equal proportions by labor force participation, hours of work and wage rates."

What's more, Kleven and his team conclude that the impact of motherhood, or as they say, "child penalties" are becoming more significant over time. "The fraction of gender inequality caused by child penalties has increased dramatically over time, from about 40% in 1980 to about 80% in 2013," reads the study.

Kleven tells Vox that one cause for these child penalties may be that Danish men are still significantly less likely to take advantage of generous parental leave policies than women, even though they are available, signifying enduring gender stereotypes despite public policy efforts.

There is also research from Norway to suggest that even in same-sex couples, the "child penalty" disproportionately impacts the partner who gives birth to and/or takes more time off to take care of a child.

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Still, some economists say the impact of child caring and pursuing flexibility are sometimes overstated. Heidi Hartmann, president of the Institute for Women's Policy Research and economist in-residence at American University, cites IWPR research suggesting that white married men actually report having some of the highest levels of professional flexibility, while single mothers actually report having the least flexibility with their jobs.

"The standard apology for the wage gap has been that women have less tenure in their jobs due to child care responsibilities," Nicole Smith, research professor and chief economist, Georgetown University Center on Education and the Workforce tells CNBC Make It. "However, close to 48% of women of childbearing age do not have children, and this does not seem to affect their earnings potential in a positive way."

Instead, Smith says that societal expectations about what a woman's career looks like may be at the center of the issue.

"We still have women making personal decisions to pursue degrees that pay less," she says, listing fields such as teaching and nursing as examples of low-paying occupations that women pursue disproportionately. "We still have occupational segregation, which yes, it is a personal decision, but it's also driven by socioeconomic challenges and it is also driven by expectations about what roles women should play in society."

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