It’s no secret that women still take home smaller paychecks than men for doing the same work. Economists call it the gender wage gap (or gender pay gap). It occurs across the entire workforce in both emerging and mature economies. Estimates vary, but the most often cited ones show women earning between 70 and 95 percent of what men earn in most OECD nations.
That’s not to take away from all the progress made to eliminate the gender wage gap. Gender discrimination and employment segregation are illegal. The doors of education are open equally to women. Parental leave programs help keep breadwinners attached to the workforce.
So why is there still a gender wage gap? New research by Princeton economist Henrik Kleven and his colleagues makes the case that raising children is the primary reason. Having the first child creates what economists call a wage penalty. It presents an immediate shock to a woman’s earning power, from which she will not likely recover fully.
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