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The True Cost of Motherhood
How the gender pay gap impacts women with children
The way women need to plan their personal finances differs from how men need to plan theirs, for a range of reasons. The gender pay gap is one of them, and it still very much exists.
Despite recent improvements, Pew Research suggests that women in the US still earn around 85% of men’s earnings, but what really needs consideration is that the gender pay gap isn’t consistent over a lifetime.
It starts off smaller than 85%, and ends up much bigger — at least it does when women choose to have children.
Young men and women who haven’t yet had children tend to earn a similar amount, while older women with children see that pay gap increase.
Regardless of whether those women later return to work, on average, women in retirement have less income and a lower net worth than men. Here’s how that all plays out, and what we can do about it.
Early on, the gender pay gap is narrow
In the 25 to 34 age group, women earn 95% of what men earn. That’s still five cents less on the dollar, even though women now have higher college enrollment and graduation rates than men. However, it’s a much smaller gap than is likely at a later age.
