The timing of childbirth and the child wage-penalty in Japan

Purpose - The purpose of this paper is to examine the effect of timing of first childbirth on the child wage-penalty experienced by working mothers in Japan. There is an increasing age of first childbirth and increasing labor force participation rate of Japanese women: does it indicate that the presence of children causes women to pay a high price for motherhood? Design/methodology/approach - This study estimates regression equations explaining the labor wages of working women, using a longitudinal data set from the Japan Household Panel Survey (the JHPS/KHPS 2004–2015). The fixed-effect method is utilized to control the bias that results from unobserved individual-specific characteristics. Findings - The results indicate that having children negatively affects the wages of Japanese women. However, there is no variation in the child wage-penalty between early child bearers (age 27 years or younger) and late child bearers (older than 27 years). In addition, an additional year of post-birth work experience contributes equally to an additional year of pre-birth work experience on wage gains. These findings remain robust with an alternate cut-off age of 30-years old. Originality/value - There is no previous study that relates the timing of the first birth to the motherhood wage-penalty in Japan. This study indicates that the timing of childbirth does not seem to be an important factor in the improvement of women’s labor wages. Thus, delaying childbirth may not be an optimal birth timing to maximize the lifetime earnings of Japanese women, especially for those who are career-minded.