Motherhood Wage Penalties in Latin America: The Significance of Labor Informality

Abstract

Abstractrevious research has established the presence of a motherhood wage penalty in many developed societies; however, whether mothers face similar disadvantages in developing countries remains underexplored. This article argues that different intervening factors emerge when considering mothers’ labor compensation in developing contexts. Labor informality, a key characteristic of labor markets in developing countries, could play a significant role in shaping the wage consequence of motherhood. Using microdata from 43 national household surveys conducted between 2000 and 2017, we analyze five Latin American countries: Argentina, Brazil, Chile, Mexico, and Peru. After accounting for selection into employment and human capital, we find that mothers receive lower wages than childless women in all five countries. The penalties are similar to those found in some developed countries, ranging from 12 percent in Brazil to 21 percent in Chile. Mothers’ higher likelihood to work in the informal sector accounts for part of the wage gap.