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Economic Engagement of Mothers: Entrepreneurship, Employment, and the Motherhood Wage Penalty

This report takes up the relationship among motherhood, caregiving, the persistent wage penalty it carries for women, employment, and entrepreneurship.

The economic value women bring to their own households and to the broader economy is well-documented. In fact, nearly all of the economic gains that have occurred among middle class families since 1970 have come from the increased earnings of women. Mothers make substantial contributions to the finances of many families and households. In 2018, nearly half of the more than 30 million families with children under 18 in the United States had either a single mother or a married mother contributing at least 40% of a couple’s joint earnings.

Despite the importance of mothers’ economic contributions, the broader economy fails to support mothers in a variety of ways. The costs of raising children fall largely on families – and disproportionately on mothers. In addition to the lack of support for combining careers with caregiving, mothers face a motherhood wage penalty, which accounts for much of the gender wage gap. Even entrepreneurship, an economic activity that can potentially offer more autonomy and flexibility, is made more difficult for mothers by child care challenges and barriers to entrepreneurship for women more broadly.

Why is motherhood undervalued and unsupported economically?

What does entrepreneurship support mean for entrepreneurs who are mothers? And how can we support mothers’ access to opportunities to engage in the economy – and ease their access to opportunity through entrepreneurship?

Featured highlights

  • By October 2020, mothers between the ages of 24 and 39 were nearly three times more likely than fathers in the same age range to report being unable to work during COVID-19 due to a school or child care closure.
  • Some mothers may leave wage or salary work and turn to necessity-driven entrepreneurship to avoid completely disconnecting from the labor force.
  • Among entrepreneur mothers, 1 in 4 reported being the sole provider in their household prior to the pandemic.
  • Twenty-seven percent of Black entrepreneur mothers reported being sole providers, compared to 19% of Hispanic entrepreneur mothers and 23% of white entrepreneur mothers.
  • Less than 1 in 5 civilian employees has access to paid family leave.
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