Why mothers turn to entrepreneurship

1 min read · May 22, 2026
New Power Labs

The need to resolve work-family conflict has long been considered the central reason women pursue entrepreneurship after becoming mothers. New research suggests that’s only part of the picture.

The motherhood wage penalty is a well-documented pattern in which mothers earn less than equally productive non-mothers. A 2024 paper by Yang, Kacperczyk, and Naldi, drawing on 28 years of matched employer–employee data from Sweden, found that the penalty is a significant driver of entrepreneurial entry in addition to work-family conflict.

Mothers facing larger wage penalties were more likely to build incorporated ventures, suggesting entrepreneurship was not merely a flexible side hustle, but a deliberate path to greater financial autonomy and growth. The pattern was sharpest among women in managerial and high-earning roles. 

The research highlights what reduces the risk of talent loss: auditing evaluation and compensation practices for bias against mothers, and creating conditions in which career advancement does not require women to choose between ambition and family.

When employers penalize mothers, they don’t just lose talent – they create entrepreneurs.

Narinder
New Power Labs

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