Wives, Mothers and Wages: Does Timing Matter?

Current trends in marriage and fertility patterns suggest that young Canadian women are delaying family formation and concentrating on developing their careers. Using data from the 1998 Survey of Labour and Income Dynamics, this study provides Canadian evidence on the effect of marital status and parenthood status on the wage rates of Canadian women. As well, this paper attempts to determine whether decisions regarding the timing of family formation influence the wages of women and whether these decisions have a permanent or temporary impact on earnings. The main results of the paper are as follows. After controlling for differences in work history, labour force qualifications and selected job characteristics, the cross sectional analysis suggests that there is no association between marital status and wages while the evidence on the relationship between wages and motherhood is mixed. When controls for years with children were included, there is a positive association of motherhood with wages that persists in the early years of motherhood but declines as the number of years with children lengthens. These results support the specialization, selection, differential treatment by employers and the work effort explanations for differences in the wages of mothers relative to other women. There is no such finding for married women and the duration of marriage. It is a well-documented fact that the acquisition of job-related skills and significant wage growth is concentrated at the start of workers' careers - which generally coincides with decisions regarding marriage and children. If this is the case, then the timing of marriage and children may be considered proxies for omitted, unobserved characteristics, related to human capital skills, differentiated work history or labour force attachment. Conforming to theoretical expectations when the timing of children is taken into account, women that postpone having children earn at least 6.0% more than women who have children early. There is no significant association between the timing of marriage and wages. The observed relationship between women's wages and their decision to delay having children tends to persist after the birth of their first child but tends to decline over time. Thus, augmented family responsibilities will tend to reduce any initial wage differentials based on delays of assuming these responsibilities.