How Much Does Social Security Offset the Motherhood Penalty?

How Much Does Social Security Offset the Motherhood Penalty?

When women become mothers, their earnings often take a substantial, and permanent, hit that becomes larger with each additional child.

A new issue brief published by the Center for Retirement Research at Boston finds that while Social Security plays a role in reducing disparities between childless women and mothers in retirement a “motherhood penalty” will remain.

Not surprisingly, women who never have children earn much more over their careers than women with children. For childless women, median earnings are $3,850 per month, compared to $1,409 for women with children, so mothers only earn 37 percent as much as childless women, according to researchers.

In recent years, though, policymakers seem to be more attuned to the motherhood penalty. In part to address mothers’ short-term loss of earnings, the American Rescue Plan Act temporarily expanded the child tax credit.

To address mothers’ retirement income gap, legislators have also proposed the Social Security Caregiver Credit Act, which would give caregivers credit for lost earnings when calculating retirement benefits; this proposal was also part of the Social Security reform plan outlined during President Biden’s campaign. To learn more, visit the CRR’s web site.