The Emergence of the Motherhood Premium: Recent Trends in the Motherhood Wage Gap Across the Wage Distribution

ABSTRACT: The average wage gap between mothers and non-mothers has greatly declined over the past two decades, but it is unknown which group of earners has led this declining trend in the motherhood wage gap (MWG): high-wage, mean-wage, or low-wage earners. This paper estimates recent trends in the MWG across women's wage distribution using the unconditional quantile regression method and finds that the MWG evolves heterogeneously by women's wage level. The MWG below the median declines less than the average. Mothers' wages sharply increase at the upper wage quantiles in the mid-1990s, leading to the motherhood premium. This great convergence of the MWG, which is largely driven by high-wage earners, may have resulted in a rise in inequality among mothers. I also explore several underlying forces to explain the heterogeneous convergence of the MWG and the emergence of the motherhood premium, focusing on changes in first-birth timing, marriage, and work hours. I conclude that an increase in marriage of high-wage women and their delays in first-birth timing result in positive selection into motherhood for high-wage earners. Moreover, increasing trends in mothers' overwork and the overwork premium are one of the probable reasons for the large changes in the MWG at the upper wage quantiles in the mid-1990s.