Delaying Motherhood Significantly Improves Lifetime Earning Potential
Working women have good reason to put off becoming moms ’til after age 30
Working women at one time or the other will have to face the tricky question as to when or whether to enter motherhood without hampering their careers. When is a woman best positioned to have a baby without suffering career interruptions and reduction in income? Researchers from Washington University in St. Louis have done the math and they say that, regardless of whether women have earned a college degree, postponing the birth of a first child until age 31 significantly improves lifetime earnings.
The new research study, published in the journal PLOS ONE and documenting the relation between a woman’s age when her first child is born and a woman’s income, reveals that lifetime incomes are lower for women who become mothers for the first time at age 30 or younger. The hit is particularly severe for non-college degree holders who give birth to their first children before reaching age 25.
“The findings highlight the financial trade-offs women make when considering their fertility and career decisions,” said Man Yee Leung, PhD, a postdoctoral research associate at Washington University School of Medicine. “The study takes a look at the total labor income from ages 25 to 60 as it relates to a woman’s age when she has her first baby.”
For the study, researchers made statistical analysis of work experience, birth and other household data of about 1.6 million Danish women in the age range of 25 to 60 from 1995–2009. Researchers relied on this unique dataset from Denmark for their study because, unlike any other nation, Denmark collects socioeconomic and health register data on 100 percent of the population, which makes large scale analysis of lifetime income and age at birth possible.
Researchers calculated the average annual salaries for each woman and used it as a measuring stick to assess the short and long term income losses associated with age at birth of first child. Based on the woman’s age at the birth of their first child, the data was categorized as before age 25 and for each subsequent three-year age range starting from 25–28 years up until the last range of 40 years and above.
“Children do not kill careers, but the earlier children arrive the more their mother’s income suffers. There is a clear incentive for delaying,” says Santaeulalia-Llopis, assistant professor from Washington University.
Analyzing the data, researchers found that college-educated women who had their first child before age 25 are deprived of about two years worth of average annual salary in their career, while those without a college degree end up forgoing 2.5 years worth of average annual salary.
Another interesting finding is that women who become mothers for the first time before age 28, irrespective of college education, consistently earn less throughout their carriers when compared to women who have similar levels of education but don’t have children. However, women who delay the birth of their first child until age 31 earn more over their entire carrier than women without children.
Women who become mothers for the first time before age 28, irrespective of college education, consistently earn less throughout their carriers than women who have similar levels of education but don’t have children
Non-college degree holders who give birth after age 28 undergo a short-term loss in income, but they quickly catch-up with women without children. Interestingly, any delay beyond age 37 only adds about six months’ worth of salary to lifetime earnings.
In the short term, non-college degree holders get the biggest hit compared to college-educated counterparts in every age range, except those who gave birth around 28–31 years of age. Here, college-educated women suffer 65 percent of their average salary, while women without any degree lose about 53 percent.
One of the interesting observations during this analysis was that the largest gain in lifetime income can be seen in the first three years of delayed childbirth. This gain however becomes smaller and even turns negative with every additional year of delay in child birth. For example, delay by three years — from 25–27 to 28–30 for college-educated women — will fetch each an approximate 5.4 percent increase in lifetime earnings, while the reward is a meager 0.8 percent for delaying from age 34–36 to age 37–40.
There are many hypotheses that try to explain theses wage reductions experienced by child-bearing women. Some researchers attribute the phenomenon, known as the “motherhood gap” or “family gap,” to disruptions in formal education and on the job training thanks to childbearing and care-taking of newborns; mothers’ preferences for family-friendly but lower wage jobs; employers’ bias and discrimination; or lower job mobility due to family ties. Raul Santaeulalia-Llopis elaborates on the reasons to say that the probability of getting promoted is low for women who experience career interruptions due to childbirth in their twenties.
Researchers believe these findings would be even more dramatic if the same study were to be conducted in US. This is because, while Denmark government’s generous policies give Danish women months and months of paid maternity leave, American women are guaranteed only a meager 12 weeks unpaid, and that’s if they’re lucky. The wage disparity between college degree holders and non-holders is also very large in the US, much larger than in Denmark.
On the positive side, unlike working women in Denmark, women in U.S who continue to work earn more, later in their careers. And more and more women, especially those with college degrees, are opting to marry and have children later in life, when they’re between 28 and 34. According to U.S. Centers for Disease Control and Prevention, in 2014 the average age of first time mothers in the United States was 26.3 years. Still, overall, women in US have significant income loss due to childbirth.
“The fact that highly productive women who have children earlier enter a lower income path is not only a loss for them, but for the entire society,” said Santaeulalia-Llopis. “If children are shutting down woman’s career growth and these pervasive effects vanish after the mid-30s, then we should start taking seriously the case for employer-covered fertility treatments.”
The emergence of IVF technology has widened the options and given greater control for women over the timing of their pregnancies. It is not just biological factors but also economic ones that are playing a pivotal role in the decision making process. Big companies like Apple, Google and Facebook are offering women the option to safely store their eggs so that they can have kids later in life.
After sorting through all the data, researchers advise that going into motherhood after getting established in their career is a smart choice for young women, as it will help them to secure a higher income later on.
Ravindra Krishnamurthy is a freelance science writer covering science, tech, environment, health, food, and culture