Has the Motherhood Wage Penalty Declined? Changing Selection into Motherhood Across Cohorts in Japan

Whether the motherhood wage penalty has declined amid family policy expansion and shifting gender norms has attracted attention. However, a change in the penalty over time could reflect both changing effects of motherhood and changing selection into motherhood, in particular selection on wage growth, which can produce spurious trends. Using nationally representative panel data from Japan, this study examines the wage consequences of motherhood over the ten years following first birth in an earlier (1960–1974) and a later (1975–1989) cohort, using fixed effects (FE) models and fixed effects individual slopes (FEIS) models, which account for individual differences in wage growth. Averaged over the ten years following first birth, the penalty was 10.1% and 3.6% in the earlier and later cohorts under the FE model, but 8.4% and 11.9% with no significant cohort difference under the FEIS model. Mothers in the later cohort also had steeper underlying wage growth than non-mothers, which is consistent with changing selection into motherhood on wage growth accounting for the apparent decline under the FE model. These findings provide no evidence that the motherhood wage penalty in Japan declined across cohorts, despite decades of family policy expansion and shifting gender norms.