The effect of children on mothers’ wages

Abstract

The study examines the effect of children on mothers’ wages. The research methods used are regression analysis and matching. The data consist of Statistics Finland’s employment statistics, from which women aged 18–64 (7,224 women) in 2001 are selected. A more detailed analysis is conducted for women who received wage income (6,843 women).

The results are similar with both estimation methods. In the regression model, children have an approximately 11 percent negative effect on a mother’s annual earnings. The effect decreases to 10 percent if the mother participates in the labour market. The number of children significantly affects the magnitude of the impact only when there are three or more children, in which case the wage gap is about 22 percent. By contrast, the age of the children matters. The effect is greatest for pre-school-aged children, at around 19 percent: one pre-school-aged child reduces the mother’s annual earnings by about 10 percent, two by 19 percent, and three by as much as 30 percent.

Using matching, the negative effect of children on a mother’s annual earnings is approximately 10 percent. Three or more children reduce annual earnings by 18 percent. The negative effect of pre-school-aged children on wages is about 20 percent. (AI translation)

• ISSN: 1236-7176
• ISBN: 952-209-031-X
• Press Release in Finnish
• Publication in PDF-format