Parity-specific motherhood penalties: Long-term impacts of childbirth on women’s earnings in Japan

•Motherhood has long-term, negative impacts on Japanese women’s earnings, even after ten years since childbirth.•Such long-term motherhood penalty in earnings is caused mainly by lower maternal labor supply.•Japanese mothers’ cumulative disadvantage in earnings is triggered mostly by the first rather than the second birth.•First birth in Japan affects maternal labor supply by causing an employment drop in the short term and reducing work hours in the long run. The issue of motherhood earnings penalty has been well-documented in many Western countries. However, only a few studies discussed how earnings penalty evolves over time and varies across different parity of birth. Moreover, related research in non-Western developed countries is scant. This study contributes to the motherhood penalty literature by examining the long-term impacts (up to 10 years after childbirth) of the first and the second birth on women’s employment, work hours, wage rates, and earnings in Japan. It proposes a novel research design based on the event-study approach and fixed effects regressions to quantify the dynamic effects of motherhood resulted from two consecutive birth transitions. Drawing on longitudinal data from the Japanese Panel Survey of Consumers (from 1993 to 2015), our results show that both the first and the second birth trigger short-term earnings penalties by causing a considerable employment slump upon pregnancy. In the long run, while women’s employment rates recover, work hours and wage rates remain significantly lower than their pre-pregnancy level, leading to the long-term earnings penalty. More importantly, the long-term negative impacts of childbirth on labor supply and wage rates result mostly from women’s first-time rather than the second-time birth transition in Japan. These findings imply that motherhood in Japan imposes long-term penalties on women’s earnings, primarily by depressing maternal labor supply after their first-time motherhood transition.