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 last several decades, and there is no unexplained wage gap between mothers and non-mothers since 2006. However, a large decline in the average motherhood wage gap (MWG) does not mean the MWG has been equally reduced for all mothers. This paper estimates recent trends in the MWG across women's wage distribution using the unconditional quantile regression method as well as changes in wage structure gap between mothers and non-mothers applying Oaxaca-Blinder decomposition method in the context of a quantile analysis. I find that the large decrease in the MWG observed on average is a high-quantile phenomenon. Mothers' wages sharply increase at the upper wage quantiles in the mid-1990s, leading to a reversed MWG (motherhood premium). This great convergence of the MWG, which is largely driven by high-wage earners, has resulted in a rise in wage inequality among mothers. I also explore plausible factors that are most closely associated with the heterogeneous evolution of the MWG, focusing on changes in first-birth timing, marriage, and labor supply. I conclude that positive selection into marriage among high-wage women and their delays in first-birth timing result in motherhood premium for high-wage earners. Moreover, increasing trends in high-wage mothers' long work hours and the wage compensation for the long hours of work are a plausible reason for the large increase in the relative wages of mothers at the upper wage quantiles in the mid-1990s.