Denmark’s childcare and parental leave policies erase 80% of the ‘motherhood penalty’

For many women in the U.S. and around the world, motherhood comes with career costs.

Raising children tends to lead to lower wages and fewer work hours for mothers—but not fathers—in the United States and around the world.

As a sociologist, I study how family relationships can shape your economic circumstances. In the past, I’ve studied how motherhood tends to depress women’s wages, something social scientists call the “motherhood penalty.”

I wondered: Can government programs that provide financial support to parents offset the motherhood penalty in earnings?

A ‘motherhood penalty’

I set out with Therese Christensen, a Danish sociologist, to answer this question for moms in Denmark—a Scandinavian country with one of the world’s strongest safety nets.

Several Danish policies are intended to help mothers stay employed.

For example, subsidized child care is available for all children from 6 months of age until they can attend elementary school. Parents pay no more than 25% of its cost.

But even Danish moms see their earnings fall precipitously, partly because they work fewer hours.

Losing $9,000 in the first year

In an article to be published in an upcoming issue of European Sociological Review, Christensen and I showed that mothers’ increased income from the state—such as from child benefits and paid parental leave—offset about 80% of Danish moms’ average earnings losses.

Using administrative data from Statistics Denmark, a government agency that collects and compiles national statistics, we studied the long-term effects of motherhood on income for 104,361 Danish women. They were born in the early 1960s and became mothers for the first time when they were 20-35 years old.

They all became mothers by 2000, making it possible to observe how their earnings unfolded for decades after their first child was born. While the Danish government’s policies changed over those years, paid parental leave and child allowances and other benefits were in place throughout. The women were, on average, age 26 when they became mothers for the first time, and 85% had more than one child.

We estimated that motherhood led to a loss of about the equivalent of US$9,000 in women’s earnings—which we measured in inflation-adjusted 2022 U.S. dollars—in the year they gave birth to or adopted their first child, compared with what we would expect if they had remained childless. While the motherhood penalty got smaller as their children got older, it was long-lasting.

The penalty only fully disappeared 19 years after the women became moms. Motherhood also led to a long-term decrease in the number of the hours they worked.

Studying whether government can fix it

These annual penalties add up.

We estimated that motherhood cost the average Danish woman a total of about $120,000 in earnings over the first 20 years after they first had children—about 12% of the money they would have earned over those two decades had they remained childless.

Most of the mothers in our study who were employed before giving birth were eligible for four weeks of paid leave before giving birth and 24 weeks afterward. They could share up to 10 weeks of their paid leave with the baby’s father. The length and size of this benefit has changed over the years.

The Danish government also offers child benefits—payments made to parents of children under 18. These benefits are sometimes called a “child allowance.”

Denmark has other policies, like housing allowances, that are available to all Danes, but are more generous for parents with children living at home.

Using the same data, Christensen and I next estimated how motherhood affects how much money Danish moms receive from the government. We wanted to know whether they get enough income from the government to compensate for their loss of income from their paid work.

We found that motherhood leads to immediate increases in Danish moms’ government benefits. In the year they first gave birth to or adopted a child, women received over $7,000 more from the government than if they had remained childless. That money didn’t fully offset their lost earnings, but it made a substantial dent.

The gap between the money that mothers received from the government, compared with what they would have received if they remained childless, faded in the years following their first birth or adoption. But we detected a long-term bump in income from government benefits for mothers—even 20 years after they first become mothers.

Cumulatively, we determined that the Danish government offset about 80% of the motherhood earnings penalty for the women we studied. While mothers lost about $120,000 in earnings compared with childless women over the two decades after becoming a mother, they gained about $100,000 in government benefits, so their total income loss was only about $20,000.

Benefits for parents of older kids

Our findings show that government benefits do not fully offset earnings losses for Danish moms. But they help a lot.

Because most countries provide less generous parental benefits, Denmark is not a representative case. It is instead a test case that shows what’s possible when governments make financially supporting parents a high priority.

That is, strong financial support for mothers from the government can make motherhood more affordable and promote gender equality in economic resources.

Because the motherhood penalty is largest at the beginning, government benefits targeted to moms with infants, such as paid parental leave, may be especially valuable.

Child care subsidies can also help mothers return to work faster.

The motherhood penalty’s long-term nature, however, indicates that these short-term benefits are not enough to get rid of it altogether. Benefits that are available to all mothers of children under 18, such as child allowances, can help offset the long-term motherhood penalty for mothers of older children.

Alexandra Killewald is a professor of sociology at the University of Michigan.

This article is republished from The Conversation under a Creative Commons license. Read the original article.