The heterogeneous effects of the first childbirth on women’s income

Abstract

This study estimates the heterogeneous effects of the first childbirth on mothers’ annual income, using data from several waves (1979-2018) of the National Longitudinal Survey of Youth. Women usually experience an immediate decrease in their income after childbirth, compared to what they would have earned if they had not become mothers. This gap closes somewhat over time, though mothers never fully catch up to their counterfactuals. Previous work tried to explain this “motherhood penalty” by estimating the average treatment effect of children on women’s income; however, these effects can be quite heterogeneous across mothers with different observable characteristics. Instead, our analysis centers on the distribution of the individual-level effects of the first childbirth on mothers’ income, using the Changes-in-Changes model and quantile regression. Identifying the features of this distribution is a challenging task as it requires knowledge of joint distribution. We find that around 73% of mothers have lower income after their first childbirth than they would have had if they had not had a child. These adverse effects are particularly pronounced among 10–20% of mothers. Our quantile regression analysis indicates that the first childbirth most negatively affects older, single/divorced, white, and more educated mothers.