The motherhood wage gap and trade-offs between family and work: A test of compensating wage differentials

The theory of compensating wage differentials may explain part of the motherhood wage gap if mothers are more likely than childless women and men to make a trade-off between monetary and non-monetary rewards when looking for a job. Whereas previous studies focus primarily on jobs that employees currently hold, we present a more accurate test of this theory by studying the extent to which childless (wo)men, fathers and mothers trade off wages and family-friendly working conditions (flexibility, no overtime) in looking for a new job. Using a unique vignette experiment in four European countries (N = 7040), we find that the theory of compensating wage differentials is not supported. When presented with fictional job-openings that vary randomly on family-friendly working conditions and wages, mothers are not more likely than fathers or childless men and women to choose jobs with more family-friendly working conditions and lower pay. Instead, we find that mothers are more likely to apply for jobs with lower wages regardless of other job characteristics. These results suggest that the motherhood wage gap may not be explained by compensating wage differentials, but by mothers' higher likelihood of applying for jobs with lower wages.