Some economic consequences of motherhood

Some economic consequences of motherhood

By Michael J. Hicks

Many women make great sacrifices at the expense of careers

Mother's Day is a splendid opportunity to think about the evolving economic effects of women as parents, how this influences their economic lives, and how women value motherhood in economic terms. None of this is especially sentimental, which is fine, for it is too weighty an issue to be left to mere sentiment.

This is as good a time as any to remind readers of how little the world changed until about 1700. In the most advanced parts of the world, development prior to 1700 was dwarfed by that of the next century. This development continues to have some of its most profound effects on family formation.

With infant and maternal mortality having changed from ubiquitous to rare, the size and purpose of families has changed in our western world.

In Europe and parts of Asia, one child is the norm. In the United States it is two or three. Expectations of survival shifted the focus of parenting and motherhood. Few of us now bear children for the purpose of looking after us in old age, or for preserving the family inheritance. That is a good thing, but the shift in families is not plainly all good.

Before the 1960s, single parent households were fairly rare and at a stable rate of fewer than one in 20 births. They have since exploded to almost half of all births. Most families in long-term poverty are single parents, and mothers head most of these families.

Mothers who parent with a partner comprise a small majority of households. Thirty years ago, about one-third of married women worked, a figure that doubled by the middle of the past decade. These moms bear children later than their grandmothers did, and later than their contemporaries who have not married. They are also better educated and have better work histories than both comparison groups.

Still, these moms sacrifice greatly for their children. Perhaps the greatest cause of gender differences in earnings is due to women having chosen occupations to accommodate families. Women are also more likely to take long periods off of work to raise children, which may interrupt or slow their careers. Both choices reduce take home pay.

We are in an interesting time with these household dynamics, with an ever-increasing number of stay-at-home dads and better educational outcomes among women. Suffice it to say, families will change much in this century.

It is easy to put a rough dollar figure on a mom's contribution to a family. Time use studies (and a bit of common sense) suggest that a typical mother's contribution to a family would cost more than $100,000 per year to replace in labor market. A working woman who stops working for 15 years to raise kids typically forgoes $1 million in earnings. This is a minimum threshold on how much we value our kids, and evidence of a still robust American family.

There is much to study and learn about the evolving role of mothers and families. One thing is certain: whatever thanks we give moms today will be insufficient.

Michael J. Hicks is the director of the Center for Business and Economic Research and a professor of economics in the Miller College of Business at Ball State University. Hicks earned doctoral and master's degrees in economics from the University of Tennessee and a bachelor's degree in economics from Virginia Military Institute. He has authored two books and more than 60 scholarly works focusing on state and local public policy, including tax and expenditure policy and the impact of Wal-Mart on local economies.

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