Motherhood Penalties: the Effect of Childbirth on Women's Employment Dynamics in a Developing Country

The economic literature has pointed to motherhood as an explanation for the persistence of labor gender gaps. The arrival of children intensifies the traditional gender roles that affect gaps in paid and unpaid work. However, the evidence is mostly for developed countries, and little is known about these dynamics in developing contexts. We estimated the impact of motherhood on women’s formal employment and wages for Uruguay, one of the Latin American countries with the highest female labor force participation rates. Through an event-study approach, we used administrative records on labor histories for the period 1996-2015 and found an important motherhood penalty: monthly wages reduce by 19% a year after childbirth, and this drop continues to increase, reaching 36% after 10 years. This is explained by a reduction in formal employment and, to a lesser extent, also a reduction in hourly wages. We also showed that low-wage women face unquestionable higher penalties.