In a recent research study, we measured the gender-specific economic impact of parenthood in Germany. Our finding: mothers may end up with less accrued wealth than women without children.
German men, who are comparable in other characteristics such as education and age, on the other hand, show similar amounts of personal wealth regardless of whether they have children.
Mothers accrue less wealth
The research, which was conducted in Germany, looked at 28,650 individuals to assess women’s personal wealth over the course of a decade, from 2002 to 2012. For the purposes of our study, personal wealth refers to all economic assets that subjects own solely as well as their individual share of assets jointly owned with somebody else.
We found that each year after a woman’s first child is born, she accrues only about 98 cents for each 1 of wealth that childless women gain. This small difference adds up over time. After being a mother for 50 years, a mother’s personal wealth is roughly 60% lower than for a German woman who does not have children, everything else remaining equal.
Graph showing gender gap in wealth after parenthood. Lersch/Jacob/Hank
This gap in capital is largely related to employment. German mothers accumulate less wealth because they are likely to stop paid work to care for their young children and, as children get older, return to work part-time.
Without full-time employment, women have less income to put into savings. Employment gaps may also reduce long-term earning potential because career advancement becomes less likely.
According to our study, women’s male partners do not appear to fully compensate for these losses in wealth by sharing financial resources within the couple.
#Germany lacks structures to help mothers with childcare. Thomas Peter/Germany
The loss in personal wealth is greater the younger a woman is when she becomes a mother. The difference may be due to the fact that career interruptions early in one’s working life are especially harmful.
Mothers additionally accrue less wealth if they are unmarried when they give birth; a difference that holds for both single mothers and those living with their partners. This finding suggests that married fathers may be more willing to compensate for their spouses’ income losses, and that married mothers and fathers are more likely to share their incomes.
By middle life (ages 40 to 60), mothers and fathers show the greatest discrepancy in wealth (see above graph). By older age, these inequalities decrease.
Why wealth differences matter
The reduced wealth of mothers as compared to fathers and to women without children has many important implications.
Financial assets and savings are resources that can be tapped to weather rainy days, independent of current income. Wealth can also be passed on to the next generation…