When you’re a woman planning a family, timing what age you decide to have a baby will have far-reaching consequences on your future earnings. Think carefully. There is a 10-year baby window that will put women in a pay gap from which they will never recover.
This is a sobering calculation the New York Times found when they crunched the numbers from the U.S. Census Bureau on how the difference between a male-female couple’s earnings will widen after a first child is born.
Having a baby between 25-35 costs working women
The time between age 25 and 35 are prime professional years, where networks get built and careers get established. They are also the years where many couples decide to have children. This is a choice that penalizes women, but not their male partners. When women decided to have their first child during that 10-year window, their salaries never bounced back. Meanwhile, women who chose to have a child before age 25 and after age 35 eventually close the gap. On average, women earned $12,600 less than their male partners before children were born and watched that number double to $25,100 less after a child was born.
“The transition to parenthood leads to a sharp and persistent increase in the gap between the earning of male and female spouses, driven by a decrease in the earnings of the female spouse,” the U.S. Census Bureau concluded.
Why were the other women able to overcome the gap? The Times suspected that it was because the gap was not as large to overcome for younger and older working mothers. Younger mothers were more likely to have lower salaries in general, and older mothers were only juggling the pay setback of one child.
“Low earners have a smaller pay gap in general, and people who have babies in their late 30s could have a smaller pay gap because they are less likely to have more than one child,” the Times wrote.
Subsidized childcare would change this
With each child, the pay gap grows. Since the 1980s, childless women have been out-earning working mothers.
Economists have calculated that women with one child today will experience a 15% pay gap compared to childless women, while mothers with two kids will take a 13% pay gap hit, and mothers with three or more children will be making 20% less than childless women.
To soften the blow of the motherhood penalty, women would need to gain back the time lost to taking care of their families. Taking care of children is expensive. The national average cost of childcare is almost $8,700 a year.
Enter subsidized childcare. When you do not have to be home at all hours taking care of your child, you have more flexibility to be working.
“It’s really, really, really clear,” sociologist Joya Misra, who co-authored the pay gap study for women with multiple children, said. “Universal subsidized childcare has the most important effect on reducing the motherhood penalty.”