Does postponing Pay Off? Timing of Parenthood, Earnings Trajectories, and Earnings Accumulation in Sweden 1990-2012

In this paper, we a) study the consequences of parenthood on earnings trajectories over the life-course, and b) analyze the impact of timing of parenthood on cumulative earnings in Sweden. We argue that parenthood can have long-term impacts on earnings trajectories, which can accumulate into considerable effects over time. Such cumulative effects can shape socioeconomic and gender inequalities in earnings and at later age, pensions. We analyze data from Swedish population registers, using the full cohorts of men and women born 1972-81. Our findings indicate that parenthood has negative effects on women’s and small effects on men’s earnings trajectories. Over time, the former accumulate into major parenthood penalties. These penalties are smaller for women who postpone motherhood due to the shorter time these women have been exposed to motherhood penalties. Parenthood timing can thus affect long-term gender and socioeconomic earnings inequalities.