Time is Money: How Motherhood Is Costly to Women and What to Do about It

Abstract

Motherhood is costly to the lifetime earnings of women because working mothers — and from the standpoint of employers, all women of reproductive age are possible mothers — are less able to compete with men on the basis of available time. This paper undertakes an empirical study of the connection between time and money. The distribution of hours and wages at the aggregate level suggests that the market assigns increasing returns to hours. We also find evidence consistent with the view that at least some time availability is a noisy signal of productivity rather than an input of productivity itself. This suggests that cheap proxies for productivity are costly not only to women, but also to men and families who may prefer a better career-family balance.

Keywords: gender wage gap, labor market, noisy signals of productivity, human capital