Association for Public Policy Analysis & Management

Matthew S. Rutledge, Alice Zulkarnain, and Sara Ellen King (Center for Retirement Research at Boston College)

Mothers earn less than non-mothers in any given year, and a career’s worth of lower annual earnings could result in significantly smaller Social Security checks. As more women qualify for benefits solely on their own work histories, understanding the effect of motherhood on lifetime earnings has become increasingly important. This project uses the Health and Retirement Study to estimate the motherhood lifetime earnings penalty.

The results show that each child lowers lifetime earnings by 6-7 percent, and a smaller – but still statistically significant – difference in Social Security income of about 2 percent. The estimated relationship between having another child and AIME has stayed flat across cohorts, but the relationship with Social Security income has grown larger, suggesting that spousal benefits do less to compensate more recent mothers with large families.

The results, therefore, indicate that mothers with children face a substantial hit to their lifetime earnings that, despite spousal benefits and benefit progressivity, result in lower Social Security benefits. These results suggest that the Social Security system does not fully compensate mothers for the motherhood earnings penalty, though causal estimates are still needed before determining how reforms might make them whole.