What to Expense When You're Expecting: Working Women Discuss the Future of Parenting
The situation is…..grim. The US remains the only OECD country in the world not to have mandated paid maternity leave. The uncontrolled gender pay gap remains at women making $0.81 for every $1 men make. And 80% of that gender pay gap can be attributed to the motherhood penalty, or the decline in earnings that a working woman sees when she has a child. We surveyed 1,000 coupled, working women around the US to ask them about their plans for having children and what they know about the motherhood penalty.
What it comes down to is this - women are faced with a lose-lose scenario. 73% of women who want kids believe that having a child will hold them back in their career. And yet, research shows that working mothers are even more productive than women without children. So why should having children hold back women? It’s time to bring career and family into harmony.
Knowledge of the motherhood penalty: what does it mean?
What causes the motherhood penalty? There are many causes, but major ones consist of only maternity leave being offered instead of both maternity and paternity, women taking time out of work outside of their paid leave, and women shouldering the load of childcare and other unpaid labor. We asked women about their overall knowledge of the motherhood penalty, and then about their decisions around each of these causes.
If you were to have a child, what percentage of your earnings would you expect to lose during the first year of parenthood?
Women who have knowledge of the motherhood penalty expected the largest earnings loss in the first year of having a child:
Interestingly, couples that want kids vs. couples that don't want kids had nearly identical views on this income penalty, so the decision whether or not to have kids is presumably not made due to the expected cost of having them. This reinforces that families want to have kids, and have to decide to take a financial loss in order to do so.
Unsurprisingly, the survey participants were able to translate their qualitative judgment on how a child would affect career development into a number (expected earnings loss), but what's interesting is that even those who "strongly disagree" that a child would hold them back career-wise still expect to lose 27% of their income.
For participants who plan on having children within the next five years, those that know what the motherhood penalty is are those who are MOST likely to take time out of work.
On a positive note, half of women said that they would split childcare responsibilities with their partner which is a good step towards shifting the burden of unpaid labor in the home. However, studies have shown that 80% of millennial couples who plan to split care, revert back to a gendered distribution of care work after a child is born, largely in part due to the structural barriers discussed above.
Maternity and paternity leave policy are another barrier for many women; when paternity leave isn’t an option, women don’t have a choice in whether they are the ones to step back from work.
This highlights both a clear need for women to feel empowered to ask the questions around policy, and a need for employers to more clearly articulate their policies to staff.
It’s not all bad news though. Younger generations are more optimistic.
In conclusion
Women are choosing to start a family, knowingly taking career and financial hits. Some of this is the reality of childcare costs and work-childcare hours mismatch, so if one parent takes a “step back” in a dual income household, it's often the lower earning partner. This defaults to women, due to structural issues - “female gendered” roles are paid less; etc. Our research clearly underlines what tens of millions of women know and feel: we want to have a fulfilling family life, and we're forced to be realistic in the tradeoffs. But just because we go in eyes wide open, doesn't mean we should have to take career or financial hits. And when a third of US households are single families, predominantly led by mothers, the motherhood penalty has serious, long lasting consequences. Whether or not motherhood is right for you, we believe that these decisions should be made without penalty, and be made as true choices, rather than defaults.
How can we start changing the narrative for women and all working parents?
On an individual level,
Sit down and think through your priorities and what makes a fulfilling life for you. What kind of lifestyle do you want to lead?
Then, understand how the family choices we make impact our long-term financial health (the Mirza app is great for this ;) )
Make a plan for childcare. Mirza is here to help here too. Childcare costs the average American family 30% of their income each year (for ages 0-5). Start budgeting and saving ahead of time so that you’re prepared for this cost. We have more resources on the cost of childrearing here.
For couples, communication - goals, priorities, what you want your family life to look like, down to some nitty gritty, and yes, definitely how you're feeling.
Many of these different causes can be mitigated and planned for if couples are able to discuss and plan out parental leave, returning to work, and budgeting ahead of time.
Men - it’s your time to shine! Read up on why splitting childcare and housework with your partner will help both of you in the long run - with finances and also with your relationship.
Pro tip: Eve Rodsky has written a book all about this and even created a card game to help you share the burden at home!
On an employer level,
If you want to retain women and close the gender pay gap, the fastest way to help is by offering equal paid parental (both paternity and maternity) leave for your employees, then make sure taking that leave is encouraged from the top, with male leaders taking parental leave.
COVID has demonstrated that flexible work results in as much, if not more, productivity for many workers (when childcare is sorted, of course). Can you improve your flexible hours policy to help parents?
Look at the data. Are working mothers in your organization the ones taking advantage of flexible work, or going part time, while men and childless women are not? Is that because it's only offered to mothers? Use the data to create more equitable policies, and to help chip away at some of those behavioral mechanisms in your workplace. If you have questions on this, we're happy to talk: team@heymirza.com
Here's the big one. Childcare. We keep coming back to it, because childcare is key. If you have questions on how you can support your employees with their childcare needs, reach out to us! Same place: team@heymirza.com
About the research
In December 2020, Mirza partnered with OnePoll to survey 1,000 employed women in the US who are currently in a relationship and who are thinking about whether to have children in the future. Mirza developed the What to Expense When You’re Expecting report as a result of the survey findings.