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Having your first child will cost you, study finds

Published: 2017-02-08

Having children has major long-term effects on mothers’ salaries. This has been shown in a study from the Lund University School of Economics and Management, by using data from some 20 000 women undergoing in vitro fertilisation (IVF) treatment in Denmark. The first child causes the greatest impact on salary, while the effects of a second child are short term.

The women who conceive as a result of a successful IVF-treatment make, on average, 11 per cent less than those who don’t.

“In order to study the effects of the first child, we have collected data on women who are undergoing IVF treatment, and compare the growth of income between the women who conceive and those who don’t, says Petter Lundborg, Professor of Economics at Lund University School of Economics and Management.

“When following up on their cases 10 years later, we see that the women who conceive as a result of a successful treatment make, on average, 11 per cent less than those who don’t.”

Having children is often given as a reason for why women, on average, earn less than men. It is difficult to establish a causal link between childbearing and income, as women with different numbers of children may differ in so many ways. However, the researchers came closer by studying the effects on income for women who conceive as a result of IVF treatment:

“When comparing the women who conceive through IVF with those who don’t, there are no significant differences between them before starting treatment. Their incomes are similar in the years immediately prior to treatment, while there is a major discrepancy in the subsequent income growth between those who conceive and those who don’t. The differences in treatment success can therefore be used as a natural experiment to study the financial consequences of childbearing.”

In order to explain the major impact on salary, the researchers have used data on the number of hours worked and hourly wages.

“In the long term, we see that the loss of income is a consequence of lower hourly wages, while in the short term it is mainly due to the number of hours worked.”

The women in the study were followed between 1991 and 2009.

“In the study, we also looked at men’s salaries, that is, the impact on salary of the partners of women who undergo IVF treatment. In these cases we find no statistical proof of impact. It appears that men’s salaries are not affected”, says Petter Lundborg.

The researchers’ study “Can Women Have Children and a Career? IV Evidence from IVF Treatments” has been accepted for publication by the renowned journal American Economic Review. The study was written by Petter Lundborg (LUSEM), Erik Plug (University of Amsterdam) and Astrid Wurtz Rasmussen (Aarhus University).