How Much Does Social Security Offset the Motherhood Penalty?

TitleHow Much Does Social Security Offset the Motherhood Penalty?
Publication TypeReport
Year of Publication2021
AuthorsRutledge, MS, Zulkarnain, A, King, SEllen
Series TitleBriefs
Document NumberIB#21-11
InstitutionCenter for Retirement Research at Boston College
CityChestnut Hill, MA
KeywordsMotherhood, Social Security

When women become mothers, their labor market income often takes a substantial hit. This “motherhood earnings penalty” becomes even larger with each additional child and permanently reduces earnings throughout mothers’ worklives. Previous studies have linked the penalty to mothers’ reduced educational attainment, more time out of the workforce, higher job search costs, and poor job matches.
What remains unanswered is the extent to which the penalty impacts women’s retirement income. This brief, based on a recent study, answers part of this question by looking at how Social Security provisions address the motherhood penalty.
The discussion proceeds as follows. The first section explains how Social Security can impact the motherhood earnings penalty and reduce retirement income shortfalls for mothers. The second section lays out the data and methodology for this analysis. The third section finds that Social Security offsets a substantial portion of the earnings penalty. The final section concludes that – despite the equalizing role played by Social Security – a motherhood earnings penalty will remain without policy intervention, such as earnings credits for caregivers.

Citation Key11783