Working Paper

The Parenthood Gap: Firms and Earnings Inequality After Kids

Abstract: We document the dynamics of career paths around parenthood, capturing worker advancement within firms and across firms of differing pay. Using a new linkage between administrative data on U.S. workers’ fertility and labor-market histories, we show that the parental earnings gap is partly explained by mothers transitioning to lower-paying firms. Firm downgrading is driven by parents who take an extended absence from the labor force. Mothers who move to lower-paying firms see improved job amenities, but less generous fringe benefits. The firm’s contribution to the parental earnings gap rises over time and reaches one-third by the child’s 11th birthday.

Keywords: Gender; gender earnings gap; Firms;

JEL Classification: J20; J30; J16;

https://doi.org/10.21034/iwp.110

Bibliographic Information

Provider: Federal Reserve Bank of Minneapolis

Part of Series: Opportunity and Inclusive Growth Institute Working Papers

Publication Date: 2025-01-15

Number: 110