Women's Salaries Plummet After Giving Birth.

• Author: Llndberg, Eric

Despite progress in recent decades to close the salary gap between women and men in the workplace, one stubborn disparity persists: mothers earn much less after having a child. Not only does their income drop significantly after giving birth--by about 40% in the U.S.--but this so-called "child penalty" lingers for years. On average, new fathers experience no such huge hit to their earnings.

A study led by Emily Nix, assistant professor of finance and business economics at the University of Southern California, has untangled some of the complex reasons behind that child penalty. It also reveals one promising way to close the gap.

"High-quality child care has a huge impact," says Nix. "It can reduce the child penalty by 25%. It's not going to totally close the gap, but I would argue that 25% is much better than zero."

Nix compared data on earnings among couples following the birth of their first child. She found that men see little impact on their earnings, but women in heterosexual couples see their pay shrink--whether due to staying home to care for the newborn, shifting to part-time work, or other reasons. That drop persists for at least five years and likely longer, Nix suggests. Heterosexual couples who adopted a child experience similar effects.

Traditional gender norms dictate that women should stay home to care for a new child, Nix indicates. Moreover, mothers generally tend to have a greater desire than men to spend time with children. 'Those factors are hard to disentangle, but they can help us look at different policies that might affect that gap."

One policy is paternity leave, which was supposed to...