Remote Work, Occupation Sorting, and the Motherhood Earning Penalty

• In Event: Wages, Technology, and Work Arrangements in Changing Labor Markets

Abstract

The motherhood earnings penalty persists most strongly in occupations with long hours and high face-time demands—business, finance, and law—yet many of these occupations are technologically teleworkable. I call this mismatch "Latent Remote": teleworkable in principle but office-bound by face-time requirements and limited remote infrastructure before COVID. The pandemic unlocked remote work precisely in these occupations, offering a natural experiment to study whether location flexibility—distinct from the schedule flexibility emphasized in prior work (Goldin 2014)—reshapes the motherhood penalty. This paper asks: does remote work take-up reduce the motherhood earnings penalty, and through which channels does it operate? I examine two channels: (1) human capital accumulation and depreciation through labor force participation, and (2) occupation sorting pre- and post-birth.

Using individual-level panel data from the Survey of Income and Program Participation (SIPP) around first childbirth, I estimate post-birth outcome trajectories separately by pre-birth occupation teleworkability, following the pseudo-panel event study design of Kleven et al. (2025). Mothers in high-teleworkable occupations experience roughly half the post-birth employment decline of mothers in low-teleworkable occupations, and recover earnings substantially faster. The divergence operates through extensive and intensive margins of labor supply, not hourly wages. After giving birth, high-teleworkable mothers also shift sharply into remote work, while their counterparts cannot.

To interpret these patterns and quantify mechanisms, I develop a dynamic discrete choice model of labor supply, occupation, and remote work take-up over the life cycle. The model decomposes the motherhood penalty into two channels: human capital accumulation and depreciation via labor force participation, and occupation choice. Counterfactual simulations then measure how the post-COVID expansion of remote work availability reshapes each channel.

The findings suggest that location flexibility plays a central and previously underappreciated role in the motherhood penalty,
particularly for women in high-skill occupations long viewed as structurally family-incompatible. The results speak directly to
policy debates over workplace flexibility mandates, parental leave design, and the distributional consequences of the remote work revolution—clarifying which women benefit from the post-pandemic labor market, and which are left behind.

Author

• Chung-Yoon Choi, Washington University in St. Louis
  Presenting Author