A Comparison of Baby Boomers and Millennials: Which Mothers Pay a Larger Wage Penalty for Motherhood?

• In Event: 2266 - Family Section Roundtables (1 hour)
  In Refereed Roundtable 60min: 21. Wage Penalties, Premiums, and Work Outcomes

Abstract

The study focuses on the differences in the motherhood wage penalty across millennial and baby boom cohorts. Previous studies on the millennial motherhood wage penalty have relied only on cross-sectional data without controlling for women’s work experience. While one recent study with the Panel Study of Income Dynamics (PSID) data utilized overlaps of samples between its time periods, this research did not fully capture the discontinuity of the millennial as compared to that of the baby boom cohort. Thus current study, by using the 1979-1994 waves of the National Longitudinal Survey of Youth (NLSY79) along with the 1997-2015 wages from later waves of this survey (NLSY97), was able to construct fixed-effects models and compare the effect of motherhood on women’s wages across baby boomers and millennials. The study finds that millennial mothers experience a smaller wage penalty compared to baby boom mothers; moreover this penalty disappears once human capital and job characteristics are controlled for, except for mothers with three or more children. While married baby boom mothers received the largest wage penalty compared to mothers with different partnership statuses, their millennial counterparts by contrast enjoy a wage boost. After controlling for human capital and job characteristics, the differences across marital status, however, become statistically insignificant among millennials. My findings therefore point to two trends: 1) the motherhood wage penalty has changed across two cohorts of young women while 2) the wage gap between mothers and non-mothers has narrowed over time.

Author

• Misun Lim, European University Institute