Career Planning: When To Have Children, Childcare Costs and Whether to Take A Career Break

planning a career

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One of the most powerful and famous lines in Sheryl Sandberg’s book, “Lean In” was “Don’t leave before you leave.” What Sandberg was referring to is the notion that women start planning for their future work-life balance before it’s necessary. In the relevant excerpt, she writes:

A few years ago, a young woman at facebook began asking me lots of questions about how I balance work and family. I inquired if she and her partner were considering having a child. She replied that she did not have a husband, then added with a little laugh, “Actually, I don’t even have a boyfriend.”

While it may be true that women are socialized to think about the tradeoffs between family and work (and Sandberg cites a Princeton University survey where 62% of undergraduate women anticipated work/family conflict compared to 33% of undergraduate men), the real issue may not be that women are planning too far in advance. The real issue may simply be that men are not doing enough of this planning, so that by default, the social assumption is that in a heterosexual household, the burden of family will fall on the woman (who has been psychologically prepared to do this for quite some time).

Of course, there’s no requirement or law that one has to plan their career or plan for a family (to the extent that that is even possible). However, for those of you who like to plan or think about your plans, it may be helpful to understand some basic facts around when women have children, the costs and options for childcare, and the impact of children on the careers of other women in a variety of different jobs and roles.

When Women Have Children

The average age of the first time mother in America is 26. This average age for first time motherhood has been rising steadily for the past 45 years and though there are multiple factors contributing to that age increase such as increased access to contraception and public health education, it also makes sense from a financial point of view.

A typical 26 year old has worked for 4 years after college, and her earnings after taxes may not provide a comfortable cushion after childcare expenses are factored in. Many commentators have pointed to the fact that high child care costs in the United States may be leading many middle class, professional women to decide it’s simply not worth it to work.

Indeed, the gender pay gap is exacerbated by motherhood. One study found that the women’s salaries tend to max out between the ages of 35 and 40 (compared to men whose salaries tend to rise until they are well into their 50’s) but that the widening of salaries between men and women happened when they became parents, with women seeing their salaries slip 4% for every child they had. Taken together, these facts suggest that while some women may delay childbirth for financial reasons (i.e. so they are in a more senior position with greater earning power before they have children), they nevertheless will start to see income declines around the time they have children.

For most highly educated women, motherhood doesn’t start until the 30’s, according to a Pew Research poll. Among women who are in their 40’s and 50’s who hold at least a Master’s degree, the median age for their first child was age 30. Anecdotally, among professional women, many consciously choose to postpone childbirth until after medical school and residency, or after law school, and in some extreme cases even after they make “Managing Director” or Partner at their financial services firms or consulting companies.

The public, however, is split on the best age for women to have children if they aspire to reach a “top executive position”. According to the same survey, approximately one-third of the American public believed that it would be more advantageous to have a child earlier in your career, 40% said it would be better to wait until a woman is well-established in her career, and 20% even said that it would be better for this woman not to have children at all.

While the decision of when to have children is obviously personal, there are also implications for a woman who is thinking ahead to the childcare options she’ll have to use in order to be a working mom.

How Much Does Childcare Cost?

It’s no secret that child care is expensive. According to the National Association of Child Care Resource & Referral Agencies, the average cost of sending a child to daycare in America is close to $12,000 per year, per child. Compare this to the median household income of approximately $52,000 per year and you can see that having 2 children in daycare becomes a financial impossibility for many families.

This issue of childcare has caused many families -- and may cause you -- to think hard about whether it makes financial sense to work. If one parent works at home to take care of the children and household, his or her work could save the family an average of $25,000. In other places, such as big cities, you would have to make far more in order to cover the costs of childcare. In New York City, for example, child care costs have been said to easily “equal $25,000 to $30,000 per child.”

After taxes, that means it only makes financial sense to work if you can clear that amount after taxes and your work-related expenses (e.g. commute and transportation costs, as well as incidental items that can add up such as lunches and work wardrobe).

The labor costs and market dynamics for child care options can vary dramatically depending on local labor markets and other market conditions. Of course, there are more expensive options such as private nannies, as well as cheaper options (e.g. home-based daycare or shared and part-time nannies, as well as au pairs) depending on where you live. Some families may even be able to rely on the help of family members such as grandparents. There are pros and cons to each form of child care, which is beyond the scope of this piece, but suffice it to say that it is a big decision and one that may depend in part on when a woman decides to have children and may impact what kind of job options and career paths she pursues.

Whether to Take a Career Break

More millennial women are contemplating taking a career break than the generation of women before them. Young women are reportedly anticipating that they may have to “dial down” or “dial up” their careers at different times to adjust for their families. Indeed, it does appear that the labor force participation rate for women has plateaued in recent years, after rising for decades. In other words, women appear to be dropping out of the workforce. While there are many reasons for women “opting out” of the workforce, there is a high price to pay whenever a woman leaves the workforce entirely for a period of time.

According to one calculator, the cost incurred by a 26-year old woman earning $50,000 a year who drops out of the workforce for 3 years to care for a child is not only foregoing $150,000 of lost wages, but additional foregone income growth which amounts to an additional $200,000 and $165,000 in lost benefits and retirement assets. In other words, her total potential income loss over her lifetime is over $500,000.

Another view of what happens when women take career breaks is incredibly sobering for anyone who accepts the loss of earnings but believes they will simply go back to doing what they did before (or something similar). One study found that only 40% of women who took career breaks subsequently were able to return to full time work. Of those who re-entered the workforce, 25% took jobs with fewer management responsibilities or lower job titles —and the jobs paid, on average, about 16 percent less than their previous ones.

This data is not meant to deter anyone from making a decision to take a career break or even leave the workforce completely. It is simply meant to help you make a decision with the data that’s currently available about the impact of your decision on your future finances and career prospects.

As one alumnae of Harvard Business explains her thinking about career and life planning: “Just as we look at strategies of companies, a lot of H.B.S. people are putting together strategies for their life.” However, it’s not women who have attended Harvard Business School who are thinking about their strategies for their work and life!

Finding the right employer, job and childcare options and thinking through when and why you may want to take a career break are all important pieces of planning and navigating (however imperfectly) through a multi-faceted life filled with the many rich and rewarding experiences most of us seek.

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