Study: Women can miss out on over $500,000 in career earnings — just by being mothers

Since having her first child in 2015, certified public accountant Katie Thomas has repeatedly asked herself the same impossible question: career or family?

Following a layoff six months after having her first child, Thomas decided to start her own business because she needed more flexibility to juggle caregiving and her career. Three years later, her daughter slightly older, she decided to reenter the workforce to work full time for one of her clients. The return wasn’t what it cracked out to be. Between 2019 and early 2023, she worked 70-plus hour weeks, all while welcoming her second child, leaving her burned out.

“I got tired of working so many hours to see my kids for maybe an hour a day,” Thomas says. “My husband and I evaluated, and we said it’s worth it for me to take a step back from what I’m doing and not work these crazy hours. That drove my decision in what I’m doing and where I’m working today.”

Millions of working mothers in the U.S. have long wrestled with the career versus family question and continue to do so today. With women disproportionately more likely than men to assume caregiving responsibilities and household labor, many feel they have no choice but to either take time out of the workforce, take a lower-paying job with more flexibility or reduce their hours after starting a family. Mothers’ earnings and career growth oftentimes suffer from these forced choices.

Experts call it the “motherhood penalty.”

A new Bankrate analysis of the Census Bureau’s Current Population Survey (CPS) data shows mothers earned 31 percent less in wages than fathers in 2023 ($55,276 vs. $72,280, respectively), a similar percentage difference to 2022 (32 percent). According to the analysis, those lost wages can compound significantly, adding up to roughly half a million for mothers over a 30-year career (assuming earnings remain the same). It makes achieving financial goals such as saving money, paying down debt and investing more difficult for mothers who are working with less over time.

— Yana Rodgers, Faculty Director of the Center for Women and Work at Rutgers University

Key takeaways

• In 2023, full-time working mothers with children under 18 earned  $55,276, while their male counterparts earned $72,280. That gap translates to a loss of roughly $1,400 a month or $17,000 annually for mothers.

• There is no “penalty” for men when it comes to parenthood. Full-time working fathers with children under 18 make roughly 23 percent more than full-time working men with no children under 18: $72,280 vs. $58,864, respectively.

• Full-time working mothers with children under 18 are more likely than full-time working fathers with children under 18 to say money (53%), parenting (36%) and chores/household obligations (29%) negatively affect their mental health, at least occasionally, according to Bankrate’s 2024 Mental Health and Money Survey.

How much does the motherhood penalty cost women?

Despite making gains in education and the workplace, women — especially mothers — still face an uphill battle in a pay gap that has shown little improvement over the last 20 years.

Using Census Bureau’s 2023 Current Population Survey, Bankrate analyzed the median annual earnings among seven groups of full-time working men and women. We took into account women and men of various marital statuses, as well as whether they have or don’t have children under 18 in their households, to accurately analyze the motherhood penalty.

Experts say the motherhood penalty is a significant contributor to the overall pay gap between men and women. Women working full time, year-round earn 84 cents for every dollar their male counterparts earn, according to latest estimates from the Census Bureau. That pay gap narrows for single women with no children and widens for mothers, according to Bankrate’s analysis.

“If you look at the gap between childless men and childless women, it’s still larger than it should be, but they’re pretty close together in terms of what their wages look like,” says Dr. Joy Misra, provost sociology and public policy professor at the University of Massachusetts Amherst.

Mothers and fathers have the widest pay gap

Among the groups we analyzed, no pay gap is wider than between working mothers and fathers. Full-time working mothers with children under 18 earned a median salary of $55,276 in 2023, while full-time working fathers with children under 18 earned $72,280 last year — a gap that translates to a loss of roughly $1,400 a month for full-time working mothers with children under 18. Annually, this is $17,000.

Full-time working mothers could lose as much as $510,000 in wages over a 30-year career, assuming those earnings remain the same over time, according to Bankrate’s calculations.

Comparatively, full-time working single women with no children under 18 earn 93 cents on the dollar compared to their male counterparts — the smallest pay gap among the groups analyzed. The pay gap between mothers and fathers with children under 18 is more than 4.5 times larger than it is for single women versus single men without children under 18.

This shows the motherhood penalty begins long before women have children, perhaps as women start to take on more unpaid labor around the home. Women start out earning less, but they’re closest to parity with men when they’re single with no children. Once they get married, the gap widens. According to our analysis, married women without children under 18 earned 79 cents for every dollar their male counterparts earned in 2023. By the time they have children, the gap is widest.

— Katie Thomas, CPA and mom of two based in Phoenix, Arizona

Where does the motherhood penalty stem from?

Rodgers says the motherhood penalty most frequently comes from women taking on lower-paying jobs that offer more flexibility after becoming parents. But that flexibility comes at a cost.

“Why are they doing that? It’s mainly because we still have an uneven distribution of care work that’s being done in the home, where women do more care work than men,” she says. “Sometimes women exit the labor market completely.”

According to a 2020 AARP analysis, 3 in 5 caregivers are women (61 percent), and 2 in 5 are men (39 percent). Even when women earn the same or outearn their husbands, they still take on more household chores and caregiving responsibilities, according to a 2023 Pew Research Center analysis.

The fatherhood bonus

Comparatively, there is no “penalty” for men when it comes to parenthood. Our analysis shows that fathers working full-time actually experience a wage bonus over time after they have children. In 2023, fathers with children under 18 made roughly 23 percent more in wages than men with no children under 18: $72,280 vs. $58,864, respectively. This gap can lead to a difference of more than $400,000 in wages between the two groups over 30 years (assuming earnings stay the same).

“It boils down to longstanding social stereotypes about what men’s roles and what women’s roles are,” Misra says. “Men get a premium when they have children because employers think of them as super responsible because they want to be able to support their families.”

Single full-time working men with children under 18 and single full-time working women with children under 18 also have a significant pay gap among the groups analyzed — roughly a 20 percent difference. In 2023, single working mothers with children under 18 earned $43,888, while single working fathers with children under 18 earned $52,728. That pay gap can amount to roughly $265,000 in lost wages for single working mothers over three decades (assuming earnings stay the same), according to Bankrate’s calculations.

“Single women who have children also really need the income and don’t want to lose their jobs,” Misra says. “Unfortunately, the stereotypes that go along with it are that their attention is going to be split and they’re going to be more focused on their children.”

• Exceptions to our motherhood penalty analysis

  Among the groups analyzed, the only instance where mothers earned more was the comparison between mothers with children under 18 and women without children under 18. In 2023, women with children under 18 earned a median salary of $55,276, while women without children under 18 earned $51,064 — an 8 percent difference.

  Jim Borbely, a senior economist at the Bureau of Labor Statistics, says the age component of this data likely complicates these comparisons. Women and men with no children tend to be younger and, therefore, have lower earnings simply because younger workers generally earn less than older workers. Still, the bonus for fathers is more than three times bigger than it is for mothers when compared to their counterparts without children.

  A further limitation in the data is that the absence of children under 18 for women and men does not necessarily imply that they have never had children. It could mean that they have children over 18 who are not part of their household. Rodgers says that if the Current Population Survey was able to capture data on whether a woman ever had a child, we would likely see a much bigger difference in earnings between women with children and women without children.

Impact of the motherhood penalty on career progression

The motherhood penalty can impact a woman’s career growth, too. Many mothers are passed up on promotions or choose to move into part-time or more flexible jobs that they’re overqualified for, to better balance their careers and caregiving. In turn, this can significantly dent their lifetime earnings and career advancement.

— Yana Rodgers, faculty director of the Center for Women and Work at Rutgers University

Thomas, a 39-year-old mom of two, says she could be leading a finance team at a large company with several people reporting to her at this point in her career. However, she intentionally took a new job in April that she was overqualified for — with a pay cut — because it was fully remote, offered flexible hours and had more family-friendly policies.

“I need a family-friendly company far more than I need progression in my career because right now, my kids are important to me, and I never anticipated prioritizing them over my career,” she says.

Alivia F, a 31-year-old new mom based in Louisiana, says she may leave the workforce once her son starts attending school in a few years because her work hours won’t align with his school hours.

“I might have to quit working temporarily or find a part-time job, unless I can find something more flexible with a school schedule, so I can be home and get him in the future,” she says.

Mothers are more likely to feel stressed about their finances than fathers

The motherhood penalty can have lifelong impacts on mothers’ finances. With fewer earnings, they’re more vulnerable to financial challenges, such as having more difficulty saving for emergencies or retirement. This can create heightened levels of financial stress, particularly for working moms who are trying to juggle their careers, finances and families.

Mothers with children under 18 are more likely than fathers with children under 18 to say money, parenting and chores/household obligations negatively affect their mental health, at least occasionally, according to Bankrate’s 2024 Mental Health and Money Survey. Here’s how those percentages break down across those three categories for mothers with children under 18 vs. fathers with children under 18:

• Money negatively affects their mental health: 53 percent of mothers with children under 18 vs. 46 percent of fathers with children under 18

• Parenting negatively affects their mental health: 36 percent of mothers with children under 18 vs. 25 percent of fathers with children under 18

• Chores/household obligations negatively affect their mental health: 29 percent of mothers with children under 18 vs. 18 percent of fathers with children under 18

4 money and career tips for working moms

If you’re feeling overwhelmed about your finances, it’s important to remember you’re not alone. Here are four steps experts recommend working moms take to alleviate their financial stress and achieve financial security.

1. Assign a “job” to every dollar you earn.

If you want to achieve financial security, start with the basics. That means having a spending plan and sticking to it. Many experts call it budgeting, but CFP Betty Wang tends to think of it as assigning every dollar you earn a “job.” She says some of the jobs are to pay bills, while another job could be to save for retirement or to pay for child care.

If you don’t know where to start, many financial experts recommend following the 50/30/20 budgeting rule. This strategy suggests splitting your budget into three categories: 50 percent for must-haves, 30 percent for wants and 20 percent for savings.

“I think you just have to be very mindful of where your dollars are going,” Wang says. “It’s prioritizing and unfortunately, there’s a trade-off. Slow and steady wins the race.”

2. Aim to save the percentage that’s matched in your 401k.

401(k)s are a great place to save money for retirement, according to Wang. Nearly a quarter of women (26 percent) working full-time, part-time or looking for employment didn’t contribute to their retirement savings between August 2022 and 2023, compared to 19 percent of working men, according to Bankrate’s survey findings.

If you have access to a 401(k) plan and your employer offers a match, aim to save the matched percentage as that’s essentially “free” money on the table. From there, gradually increase your contributions until you can put roughly 15 percent of your income annually toward retirement.

“Let’s say they match 3 percent of what you contribute,” she says. “That’s another 3 percent your employer will be putting in.”

3. Have different savings funds for different purposes.

If you have multiple savings goals, you should have multiple high-yield savings accounts for those goals.

Wang says she’s a “big proponent of having different funds for different purposes.” Whether it’s an emergency fund, a child care fund or a fun fund, she recommends intentionally separating your dollars across various savings accounts.

First, prioritize building three to six months’ worth of expenses in an emergency fund. Wang says an emergency fund is “paramount” for women so they’re not trapped in a job or taking on high-interest credit card debt they can’t pay off. For single parents, Wang recommends setting a goal of eight months’ worth of expenses. After establishing a solid emergency savings, shift your focus towards saving money for other financial goals.

“I know it’s hard to get to when you have a lot of competing priorities, but the reason is that I want the women to have a choice,” she says. “I don’t want them to take the first paying job out there because that leads to being unhappy, burned out and potentially having to change their job.”

4. Always negotiate your salary and benefits.

If there’s one way women can advocate for themselves in the workplace, it’s by asking for higher pay or additional work benefits. Wang says negotiating for higher pay or specific benefits can be intimidating, and even her most successful female clients struggle to ask for more money or flexibility. However, it’s the quickest way to ensure you start earning more or get access to additional benefits straight away.

“We all struggle with asking more because we don’t want to be the squeaky wheel,” she says.

She suggests starting with research to determine the salary range for your job title, level of experience and location. While doing research online is essential, consider also connecting with other professionals in your industry to better understand salary ranges. Keep your market research handy during the negotiation process, prioritize what you need and bring that to the negotiation table. It could result in a higher salary, signing bonus, working from home more or other work benefits.

“Most recruiters expect you to negotiate, and I think we as women fall down there because we just accept what’s given to us. I’ve just encouraged women to ask.”

• Methodology

  Bankrate aggregated median weekly earnings from the Census Bureau’s 2023 Community Population Survey to analyze wage gaps among the following full-time working groups:

  • Women without children under 18 vs. mothers with children under 18

  • Mothers with children under 18 vs. fathers with children under 18

  • Women without children under 18 vs. men without children under 18 (partnered and unpartnered)

  • Single women without children under 18 vs. single men without children under 18

  • Men without children under 18 vs. fathers with children under 18

  • Single mothers with children under 18 vs. single fathers with children under 18

  • Married women without children under 18 vs. married men without children under 18

  All figures are in 2023 dollars, rounded to the nearest whole dollar. The analysis uses median weekly wages for all full-time wage and salary workers regardless of race or ethnicity, and self-employed people are excluded.

  Unless specified, full-time working women and men with or without children under 18 could have any marital status (partnered or unpartnered). Full-time working mothers and fathers have at least one child under 18 at home. Women and men without children under 18 mean the householder does not have any children in the household under 18 and they may have older children who are not part of their household. In the analysis, “single” is defined as a person who’s never been married, is married but the spouse is absent in the household, separated, divorced or widowed.

  Median annual earnings for all groups are derived by multiplying median weekly earnings by 52 weeks. Median hourly wages and cent per dollar figures for all groups are derived by dividing median weekly earnings by 40 hours, which assumes a full-time work week.