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May 17 2011

Have Children, Half Salary?

By at 12:04 pm

Is there an economic cost to becoming a mother?

A recent research project from Harvard, Columbia, and NYU professors tried to figure that out. Professors researched whether that cost of becoming a mother is affected by either the skill level or the age of the woman when she has kids. The conclusion is striking.

Apparently, the more skills you have, the more you pay for having had a kid – but the longer you wait to have a kid (if you’re high-skilled), the smaller your economic sacrifice will be.

If you’re a high-skilled woman, your wage trajectory will flatten out at roughly the same exact second that you have a child. Ten years after having had your kid, your wages will be 24% lower than your counterpart’s. Whether you’re a high- or low-skilled man, becoming a parent will have no effect whatsoever on your wages.

Yeah, all that sounds really fair. Think you’re exempt because you just took maternity leave and went right back to full-time work? No, you aren’t.

So why was this study so dramatic? Largely because it looks at wage growth, not just the actual money going into the paycheck –so you can see how quickly the salaries of these women were growing before they had kids, and then look at what happened after. Also, it notes that women who have children are generally on a different wage path than their childless counterparts.

To me, all this reflects certain unpleasant realities as to American child raising. There is no reason why an educated, smart parent shouldn’t be able opt to put their professional degrees on hold in order to be with their child. But there are plenty of reasons, in fact, as to why they can’t – debt, poor parental leave alternatives, and a situation in which the attitudes toward working men and working women are extremely different from what we’d hope they’d be.

What do you think – are you surprised by these results? What do they say to you? What kind of financial sacrifices did you have to make in order to become a parent?

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