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Parenthood wage penalties in a double income society

Author

Listed:
  • Sara Cools

    (BI Norwegian Business School)

  • Marte Strøm

    (Institute for Social Research)

Abstract

We estimate how parenthood affects hourly wages using panel data for Norwegian employees in the years 1997–2007. Though smaller than for most other OECD countries, we find substantial wage penalties to motherhood, ranging from a 1.2 % wage reduction for women with lower secondary education to 4.9 % for women with more than four years of higher education. Human capital measures such as work experience and paid parental leave do not explain the wage penalties, indicating that in the Norwegian institutional context, mothers are protected from adverse wage effects due to career breaks. We do however find large heterogeneity in the effects, with the largest penalties for mothers working full time and in the private sector. Contrary to most studies using US data and to previous research from Norway, we find a small wage penalty also to fatherhood. Also for men, the penalty is greater for those who work full time and in the private sector. A substantial share of the fatherhood wage penalty is explained by paternity leave.

Suggested Citation

  • Sara Cools & Marte Strøm, 2016. "Parenthood wage penalties in a double income society," Review of Economics of the Household, Springer, vol. 14(2), pages 391-416, June.
    • Handle: RePEc:kap:reveho:v:14:y:2016:i:2:d:10.1007_s11150-014-9244-y
    DOI: 10.1007/s11150-014-9244-y
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    References listed on IDEAS

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    Cited by:

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    2. Dominique Meurs & Elena Vilar & Claudio Lucifora, 2019. "Having a child? Here is the bill - Parenthood, Earnings and Careers in an Internal Labor," Working Papers hal-04141921, HAL.
    3. Paweenawat, Sasiwimon Warunsiri & Liao, Lusi, 2022. "Parenthood penalty and gender wage gap: Recent evidence from Thailand," Journal of Asian Economics, Elsevier, vol. 78(C).
    4. Sara Cools & Simen Markussen & Marte Strøm, 2017. "Children and Careers: How Family Size Affects Parents’ Labor Market Outcomes in the Long Run," Demography, Springer;Population Association of America (PAA), vol. 54(5), pages 1773-1793, October.
    5. Jessica Nisén & Maarten J. Bijlsma & Pekka Martikainen & Ben Wilson & Mikko Myrskylä, 2019. "The gendered impacts of delayed parenthood on educational and labor market outcomes: a dynamic analysis of population-level effects over young adulthood," MPIDR Working Papers WP-2019-017, Max Planck Institute for Demographic Research, Rostock, Germany.
    6. Haoran He & Sherry Xin Li & Yuling Han, 2023. "Labor Market Discrimination against Family Responsibilities: A Correspondence Study with Policy Change in China," Journal of Labor Economics, University of Chicago Press, vol. 41(2), pages 361-387.
    7. Kotyrlo, Elena & Bulgakov, Ilya, 2021. "Fatherhood, marriage and male labor market outcomes," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 62, pages 125-143.

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    More about this item

    Keywords

    Parenthood penalties; Welfare state; Gender wage gap;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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