The Financial Upside to Fatherhood: Do Dads Make More?

The Financial Upside to Fatherhood: Do Dads Make More?

Ah, the joys of fatherhood. Kissing your kids goodnight, teaching them to tie their shoes, watching their first Little League games and … scoring a higher salary?

While few fathers become parents for the purpose of getting a pay bump, kids do seem to mean more money. In fact, a growing body of research suggests many American men reap the benefits of the “Daddy Bonus,” which describes the phenomenon of the boost in earning power for men who have children. Women, on the other hand, are believed to experience a “Mommy Tax,” the term describing the negative impact that having kids can have on women's income.

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The latest insights on this topic come from a study by the Graduate Center at the City University of New York, which found that men without kids earned a whopping 40% less than men with kids in 2010. Among men in their prime earning years (ages 35 to 49), the gap between dads and non-dads was especially pronounced. While men without kids earned just $35,970, men with kids made as much as $54,500.

This study expands on research published earlier this year by the same authors, which documented the existence of the “Daddy Bonus” and the “Mommy Tax” among New York City residents.

But the current research introduces a new idea—the fact that women with kids might also earn more than women without kids, except in their prime earning years. In 2010, moms in general made about 25% more than non-moms; but moms specifically between ages 35 and 49 made slightly less than their childless counterparts.

There are a number of potential explanations for the Daddy Bonus and the Mommy Tax. For one, the most recent study found that more dads than non-dads are employed full time—plus, they are more likely to hold managerial positions.

But there could also be an implicit bias that favors fathers—and actually hurts mothers. While employers might see fathers as more responsible than men without kids, they might assume that mothers will be less devoted to their jobs because of their responsibilities at home.

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