Press Story

While the gender pay gap for men and women in their 20s has almost disappeared, the impact of having children still has a significant impact on the wages of mums and dads, according to new analysis by the think tank IPPR.

In a report to be published in the New Year, IPPR analysis shows how the better known 'motherhood pay penalty' has a previously unknown partner: the 'fatherhood pay bonus'. IPPR's analysis shows also that while the earnings prospects of women who postpone having children have improved, things have got worse for women who have children earlier.

IPPR analysed data about men and women born in 1958 and 1970, to assess what impact 50 years of feminism has had on the way we live today. IPPR's analysis shows:

Mothers born in 1958 earned 14 per cent less than they would have if they didn't have children by the time they were 40 (in 1998)
Mothers born in 1970, also earn less (by their late 30s) than they would have if they didn't have children (11 per cent) but slightly less than if they had been born a decade earlier.

IPPR's analysis also shows that mothers earn less than fathers:

Mothers born in 1958 who had children by the age of 40 could expect to earn 32 per cent less than a father born in the same year.
This 'motherhood penalty' has declined slightly. Mothers born in 1970 could expect to earn 26 per cent less than the average father, by their late 30s.

But as well as this 'motherhood pay penalty' IPPR's analysis also shows a 'fatherhood pay bonus':

Fathers born in 1958 could expect to be earning 16 per cent more by the age of 40 than if they decided not to have children.
This reward for fatherhood increased to nearly 19 per cent for those born in 1970. IPPR also found no evidence that the age men had children had any effect on their earnings.

International academic evidence suggests that both the 'motherhood pay penalty' appears to be strongest in countries with policies and cultural values that support the ideal of the male breadwinner and the female homemaker.

Academic evidence suggests that there are a number of factors that can help explain the 'fatherhood pay bonus'. In some cases, upon becoming fathers, men increase their earning capacity because they feel a greater responsibility to breadwinning for the family (and to compensate for their partners' reduced earnings). Other research suggests that fatherhood is valued by some employers because of the perceived loyalty it may bring and is therefore rewarded. Other reasons suggest that some fathers wait to have children until they feel like they earn enough to support a family.

Female employment rates in the UK are much lower for mothers than for women without children, and there is much more variation in employment rates between mothers and women without children than there is between men and women without children. OECD data shows that in countries with the highest maternal employment rates, like Iceland, Sweden and Denmark, have high-quality affordable childcare provision and comprehensive parental leave policies.

IPPR's analysis shows that while the earnings prospects of women who postpone having children have improved, things have got worse for women who have children earlier.

Women born in 1958 who had their first child later (between the ages of 25 and 32) were likely to earn 12 per cent less than women without children. For women born in 1970 this difference decreased to less than 10 per cent.
Women born in 1958 who had their first child between 18-24 years of age were likely to earn 17 per cent less than a woman without children. Those born in 1970 who had children at the same age were likely to earn 20 per cent less than women without children.

IPPR's report will show a strong association between occupational class and the age women have children. Professional men and women are more likely to have children when they are older and much less likely to have children in their teens and early twenties when compared to lower skilled and particularly unskilled men and women. Professional and managerial women are also more likely to not to have children, in contrast to men.

Dalia Ben-Galim, IPPR Associate Director, said:

"Women have made lots of progress. Female employment soared in the 1980s, since the mid-1990s girls have been outperforming boys at school at university and in the last decade the gender pay gap between men and women in their twenties has almost disappeared.

"But discussions about gender and pay are often divorced from the wider structural context that drives female disadvantage in work and wages, which is closely associated with their primary responsibility for care, particularly childcare.

"Our analysis of the earnings of women born in 1958 and 1970 suggests that the impact of having children on women's earning and employment prospects has, on average, improved slightly over time. Most of the mothers of children born in 1958 would have taken a long break from work after having children, and those in relatively good jobs experienced a fall in occupational status and earnings. Their daughters were more likely to return to work quicker, and to maintain occupational status after having children. Full time working women born twelve years later, in 1970, are doing better but mothers are still penalised compared both to women without children and to men with children.

"But we were surprised to find a 'fatherhood pay bonus'. With dads in the UK tending to work long hours and many fathers still seeing themselves as breadwinners, they may be working longer to make up for their partners working fewer hours."

Notes to Editors:

IPPR's new report on Women's aspirations across generations will be published in the New Year. For more see: http://ippr.org/research-project/44/8462/women-across-generations-expectations-and-aspirations

The analysis above relates to those in full time work.

The report shows that the biggest rise in female employment occurred in the 1980s, and was supported by the growth in female-dominated occupations in the personal services sectors. However, changes to male employment and earnings also had a 'push' effect in some communities. Men make up the majority of employees in most sectors, but the industries in structural decline, particularly large parts of the manufacturing sector, are male-dominated, and men with lower levels of education in particular have experienced a decline in their earnings and employment prospects.

The report shows that men born in 1958, who hit the labour market on the cusp of deindustrialisation in the 1980s, were more likely than their fathers to suffer job losses, negative changes in occupation and a fall in earnings. Between 1979 and 2010, male inactivity rates rose from five per cent to 17 per cent, while female inactivity rates fell from 45 per cent to 30 per cent over the same period. While the main reason for inactivity among women is looking after a family, studies have linked high rates of male inactivity with former industrial towns, and particularly mental health and substance misuse problems associated with long term unemployment. The decline of routes into well-paid and skilled jobs in manufacturing led to a fall in household incomes that meant that, for some families, dual-earning has reflected a financial necessity and not simply changes in the attitudes and aspirations among women.

Contacts:

Richard Darlington, 07525 481 602, r.darlington@ippr.org