The Impact of Childbearing on Wages of Women of Differing Skill Levels in Ghana

High skill women bear children far later and less often than do low skill women. The former typically postpone childbearing until their late 20s and often well into their 30s. A significant minority seems to never have children at all (Ellwood et al, 2004). Low skill women typically have children comparatively young, and nearly all have at least one child in their life. Some 64% of high school graduates and nearly 80% of dropouts among women born in the early 1960s had a child by the time they reached 25 (Ellwood et al, 2004). Only 20% of college graduates were in the same position. Even by age 30, 80% of high school grads had given birth while only half of college grads had. By age 40, a period that nearly marks the end of childbearing opportunities, most college grads have had children, but more than a quarter have none. Aggregate fertility for this college educated group is now well below the 2+ required for stable reproduction (Ellwood et al, 2004).

Interestingly, the differential pattern by education, though it has long existed, has become far more dramatic in recent decades. Among the cohort of women born 20 years earlier, the timing of childbearing for high school dropouts was not very different from what it is today, though total fertility was higher. But college graduates behaved quite differently (Ellwood et al, 2004). Nearly 50% of college grads had children by age 25 and only 18% had no children by age 40, even though college graduates were a far smaller and more elite group in that earlier cohort (Ellwood et al, 2004). The obvious question is: what accounts for the dramatic differences in childbearing patterns by skill level? This paper explores whether the career costs of childbearing are higher for high skill women. There is abundant theoretical and empirical literature exploring the economics and sociology of fertility and family formation (Ellwood et al, 2004).
This literature uniformly assumes that the labor market behavior of at least one parent will be affected by the presence of having a child and that expectations regarding labor market outcomes in turn influence family decisions. Yet the true consequences of childbearing on the labor market outcomes of women have received only modest attention, mostly involving studies of the static effect of children on pay of women. Limited attention has been paid to how the children might influence longer wage trajectories, and importantly, whether or not the long term labor market consequences of childbearing might vary by the level of human capital or other characteristics of the parent (Ellwood et al, 2004).

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