Parent Traps and Switching Costs

Professionals have many reasons for changing jobs or even changing roles in their current job, from wages, possibilities for career advancement, geographical needs, and less travel to improved work-life balance. But what factors prevent professionals from switching jobs or moving into new roles? Economists have long linked age as driving this decline in occupational switching, but other factors may also strongly influence professionals’ lower likelihood to switch jobs.

Occupational switching denotes switching jobs or roles in two consecutive months; for example, if I leave a role at Company A at the end of the month and start at Company B, that’s one instance of occupational switching. Switching usually represents career advancement, developing skills, and/or correcting job mismatches to a role or firm that better suits someone’s skills, interests, or qualifications. A decline in switching can thus indicate bigger problems in the workforce. Understanding the factors behind this decline – beyond age – may unlock greater efficiency levels, better understanding of our current workforce, and higher levels of support and morale amongst working parents in firms.

According to Walton College Economics faculty member Andrew Yizhou Liu, one important, but understudied, factor is parenthood. Parenthood has long been studied for its effects on wages and working hours, but Liu argues that parenthood has a noticeable effect on occupational switching as well. In “Parenthood and occupational mobility,” Liu examines the impact parenthood has on occupational mobility while also looking at how these factors operate across different demographic groups.

What the Data Show

The benefits of switching jobs or roles are straightforward: it can create upward career mobility. But the potential costs of switching cannot be ignored, nor can the potential costs of not switching. Yes, an employee moving from a lower- to a higher-level job – climbing the career ladder, essentially – experiences upward mobility. But what about an employee who is a parent that must move to a lower-level job because they need to work fewer hours, more flexibility, or less responsibility, or an employee who remains in their pre-child occupation because they cannot take on more duties or responsibilities? Those workers experience downward mobility.

Working parents experience downward mobility or lower rates of switching as they age at a noticeable rate. For example, employees aged 25-45 who become first-time fathers are 20% less likely to switch occupations; first-time mothers of the same age are 14% less likely to switch, specifically during the first five years of motherhood. These rates are also elevated among certain demographics. That said, while mothers and fathers often do not switch jobs – or feel unable to switch – after having children, fathers benefit more over time by receiving more pay in their current roles while mothers do not often receive those same advantages.

Research has long referred to this as the motherhood penalty, as mothers working full-time make 71 cents for every dollar that fathers make, on average. For mothers working part-time, the difference is even higher: 63 cents for every dollar a working father makes. Couple this with the lower likelihood to switch, and it becomes evident that, among working women, parenthood “could diminish their prospects for ascending the occupational ladder.”  And, yes, while many researchers have also discussed a fatherhood bonus, Liu also points out that these bonuses are not spread out equally. For example, single fathers face a more significant decline in occupational mobility compared to married fathers, leading to reduced job opportunities and opportunities for advancement. Societal perceptions that may lead to fatherhood bonuses for married fathers may not always favor single fathers in the workplace.

Other demographic factors beyond marital status play a role in occupational switching amongst working parents. While single working parents in general experience a more sizeable decline in occupational mobility because they lack the dual-income support of married parents, Liu also examined an array of demographic factors from education to ethnicity. For example, working parents with just high school degrees also encounter steeper declines in mobility regardless of gender. The severity is greater for mothers, however, as these women usually have lower income and wealth, which oftentimes means fewer financial resources to assist with parenthood demands. As for race and ethnicity, while Black and Hispanic working fathers showed greater mobility reductions than White men, the same did not hold true for women: Black women encountered the smallest decline in occupational switching among mothers and no significant difference among women of different racial or ethnic groups was reported. These latter findings were particularly noteworthy, as they challenge societal perceptions and assumptions and thus indicate the need for additional study.

What Can We Do About It? 

Parenthood is a life-changing event in myriad ways, but it does hold the potential to reduce parents’ ability to switch occupations. As a result, parenthood can curb career growth, uphold wage gaps, and reinforce stereotypical gender roles, all of which can limit upward mobility and further inefficiencies like job mismatches. This is especially true for certain demographics, given that “individuals with higher educational attainment or those who are married” are more likely and able to switch occupations.

Liu’s research highlights the necessity of incorporating family-friendly policies in the workplace, many of which will be “particularly beneficial for enhancing occupational mobility among disadvantaged worker groups,” especially single parents or parents who only have a high school education. Parental support and a focus on parent well-being can have an impact on lifetime earnings, but they can also be a true gamechanger for firms, as these parents' job performance levels cannot help but increase. Firms that understand this dynamic and implement supportive, family-friendly policies may see lower levels of mismatch and higher levels of upskilling, career-minded working parents staying in and perhaps joining rather than leaving their ranks.