Modeling the Effect of Children on Women’s Wage Distribution: A Quantile Approach

Melissa Hodges, University of Massachusetts
Michelle J. Budig, University of Massachusetts

Pooling data from the 1979-2004 waves of the National Longitudinal Survey of Youth and employing penalized quantile regression, we test whether the size of the penalty for motherhood differs across the distribution of white women’s earnings. Net of controls for labor supply, human capital, family structure and demographics, we examine variation in the size of the motherhood penalty by age of youngest child, timing of first birth and marital status at different points in women’s earnings distribution. Results indicate that the motherhood wage penalty is largest for the lowest earners: those at the 10th quantile of the earnings distribution. Importantly, the larger penalty found among lower earners cannot be explained by welfare receipt. Among high-earning women, the motherhood penalty is smaller and cannot be attributed to having husbands with reduced work hours. Our findings challenge past research that emphasizes greater difficulty among professional and highly skilled women in combining work and family.