The Kauffman Foundation recently released Economic Engagement of Mothers: Entrepreneurship, Employment, and the Motherhood Wage Penalty, a new research report highlighting gender inequity in entrepreneurship. It was aptly published just as these disparities took center stage following the release of December’s jobs report, which showed women accounting for all of the month’s net 140,000 job losses. Men comparatively gained 16,000 jobs over the month.

The concurrent release of the research and jobs numbers are coincidental in timing only. Ten months into a pandemic, the systems-deep issues highlighted in the research have long been building to December’s egregious employment report. The data shows:

• Among full-time, year-round workers, women earn 81.5 cents for every dollar earned by men — a gender wage gap of 18.5%. This gap is notably smaller between women and men without children (about 7%) and much larger between women and men with children.
• Although estimates vary, the gross motherhood wage penalty is typically estimated to be between 5% and 10% per child.
• By October 2020, mothers between the ages of 24 and 39 were nearly three times more likely than fathers in the same age range to report being unable to work during COVID-19 due to a school or child care closure.
• Some mothers may leave wage or salary work and turn to necessity-driven entrepreneurship to avoid completely disconnecting from the labor force.
• Among entrepreneur mothers, 1 in 4 reported being the sole provider in their household prior to the pandemic.
• Twenty-seven percent of Black entrepreneur mothers reported being sole providers, compared to 19% of Hispanic entrepreneur mothers and 23% of white entrepreneur mothers.
• In 40 states plus the District of Columbia, the cost of child care for two children exceeds mortgage costs among homeowners.

Previously released data on pre-entrepreneurship leavers (i.e., people who abandon a business idea before officially beginning the process) revealed that 37% of women “leavers” do so because of family constraints, including caregiving responsibilities. This despite nearly half of recent women entrepreneurs citing work flexibility as their reason for starting a business.

A forthcoming refresh of America’s New Business Plan addresses this issue by calling on policymakers to ameliorate this barrier by increasing access to caregiving.

As the research suggests, expanding choice and giving mothers true flexibility will be critical to closing the motherhood wage penalty and ensuring gender equity not only in entrepreneurship, but in the economy at large.