Postpartum Taxation and the Squeezed Out Mom

Abstract

Faced with too-short (or nonexistent) maternity leaves, inflexible work schedules, and the soaring costs of childcare in the United States, many new mothers temporarily leave the workforce to care for their young children. Although media attention has focused on the “opt-out” mom, many more mothers are squeezed out of the external workplace. But mothers that try to return to work may discover that it is difficult to do so, as employers have been shown to be less likely to hire mothers than others. A mother that does reenter may find that even short periods out of work cost (sometimes far) more than the income foregone during her intended time out and may result in a reduction in her overall earning potential, retirement, disability, and Medicare benefits. This may contribute to severe economic hardships among divorced mothers and their children, the underrepresentation of women in high-level leadership positions, and a wage gap between mothers and others, to name a few problems.

Recognizing these realities, experts that study the biases faced by women in the workplace encourage mothers who want or need to work to resist leaving, even during their children’s preschool years when childcare (and other financial and personal) costs are so high that the short-term prospects of working may seem (in some cases quite) low. These experts instead urge mothers to view these high costs as investments in their most valuable economic asset: their lifelong earning potential. Using these insights, this Article proposes ways in which the Internal Revenue Code could be modified to help prevent some new mothers from being squeezed out of the external workplace.

Keywords: maternity leave, parental leave, pay gap, gender pay gap, postpartum, motherhood, taxation, taxes, tax