What is the motherhood penalty, and how big is it?

As wonderful as motherhood can be, women often pay a high price to experience it.

While the emotional, mental, and physical costs may be tricky to measure, the maths on the financial hit women take when they have children is clear.

It's known as 'the motherhood penalty', and we explain exactly what it is — and how big — with the help of experts.

What do we mean by motherhood penalty and can we put a number on it?

The motherhood penalty is really a care penalty, which "falls disproportionately to women as mothers", explains Sheree Gregory, a senior lecturer of human resources and management at Western Sydney University.

She says research shows having children has a higher impact on women and their "employment rates, transitions, and status than it does on men".

Primarily, mothers spend less time in paid work across their lifetime than men and childless women.

"In Australia, survey data from the Australian Bureau of Statistics (ABS) shows that women's paid work participation hours decrease at the birth of a child … and increase again with the age of the youngest child in the household," Dr Gregory says.

"Childbirth, in short, has immediate and far-reaching consequences for income, overall lifetime earnings and the ability to build up superannuation contributions or make retirement savings."

Women reduce their paid work hours by about 35 per cent across the first five years after the arrival of children, earning 55 per cent less of their pre-pregnancy wage. That gap remains high for a decade after the arrival of children.

Men's hours of paid work drop only during the first month of parenthood before returning to previous levels.

The average 25-year-old woman today who goes on to have one child can expect to make $2 million less in lifetime earnings compared to the average 25-year-old man who also becomes a parent.

In what ways does the motherhood penalty play out?

One of the main ways women with children are impacted is by needing to take time out from the workforce for caregiving responsibilities.

And they are more likely to return to part-time work to continue the lion's share of that caregiving.

(Rates of women employed part time in Australia are high compared to the OECD average which has 38 member countries.)

But it's not just about time out of the workforce, or reduced working hours, explains Natasha Bradshaw, a senior associate in Grattan Institute's economic policy program.

The motherhood penalty can also play out in women needing more flexibility to meet their caring role, restricting their options for job mobility.

In some cases, the motherhood penalty can begin before a woman even becomes a parent as they may select jobs or industries that are more flexible, she says, "pre-empting that need" for when they have children.

Ms Bradshaw says there is "the greedy jobs concept" where there can be a high pay-off for working long and inflexible hours — something women who are primary carers aren't able to do.

And conscious or unconscious bias can play a role, with employers less likely to choose women with children for opportunities.

"You might not be considered for a promotion or asked to take on extra responsibilities because people assume you have this extra burden," Ms Bradshaw says.

The work women do at home

Looking at the workplace regarding the motherhood penalty "is only one half of the picture", says Dr Gregory.

To fully understand the motherhood penalty, she says we need to look at social expectations of motherhood.

Australian research from 2023 shows women spend eight hours more than men on unpaid domestic work, and women living with children spend more than 35 hours per week doing unpaid domestic work (while men spend 19.7 hours).

"Women are still doing the lion's share… the second shift," says Dr Gregory.

She says that domestic labour and caregiving is "consistently devalued", and yet an integral part of what makes paid work possible.

Ms Bradshaw says the best way to start addressing the motherhood penalty and "spreading the care burden" is paid leave for both parents.

"When you have both parents taking leave early on, it's really helpful because they both learn how to parent early on, instead of when mum starts to specialise in the parenting."

Additionally, Ms Bradshaw suggests anything that offers a person more flexibility over when they do their job is helpful.

Dr Gregory says the barriers mothers face when trying to combine paid work and care are unlikely to disappear in the immediate future.

"To use the words of Australian scholar Lyn Craig: the costs of motherhood include being at risk of poverty in old age."