The impact of children on the lifetime earnings of Australian women: Evidence from the 1990s

This article presents estimates of the impact of child rearing on the lifetime earnings of Australian women using 1997 cross-sectional data. It is found that women with children have substantially lower lifetime incomes than do childless women. For example, women with a secondary education with one child have lifetime after tax earnings around $ 160000 lower than is the case for childless women. Additional children are associated with much lower cumulative earnings. The article shows that the impact of having children on women's lifetime earnings decreased over the period 1986-1997. Explanations for the observed decrease are not directly investigated in the article. However, we canvass several possibilities including the increased availability of child care places which may have allowed women with pre-school children to return to the labour force much earlier than previous cohorts.