New Estimates of Mothers’ Forgone Earnings Using HILDA Data

Women who have children miss out on potential earnings. This happens through a combination of time out of the labour force, reduced working hours and lower paying jobs. We examine mothers' forgone earnings using HILDA 2001 data and find substantial effects, which vary with the woman's education and number of children. At a middle level of education (completed year 12 only), women forgo around 31 per cent of lifetime potential income for a first child, an additional 13 per cent for a second child, and a further 9 per cent for a third child. More highly educated women lose less proportionally than the less educated, although their dollar amounts of forgone earnings are higher. There is evidence, in comparison with previous studies, that the proportions forgone are falling with time, but more clearly so for women with higher education. We also find that women who delay motherhood maintain slightly more earnings than early childbearers.