Women workers still pay a 33 per cent wage penalty after having children

Pay gap among highly educated has not narrowed in 20 years, IFS reports


Once a woman has her first child, the pay gap expands year-on-year for 12 years, by which time women earn 33 per cent less than their male counterparts, new research from the Institute for Fiscal Studies had found.

The study, funded by the Joseph Rowntree Foundation, shows that the ‘motherhood penalty’ is not caused by reduced hourly pay, but by women with children’s increased likelihood of working half-time. As a result, the wages of men and women working full-time pull further and further ahead.

For women who stop working altogether and then return, their wages are two per cent lower for each year spent out of the workforce.

IFS motherhood penalty

Among young men and women, employment rates are basically identical and the pay gap is relatively small. However, a big difference opens up as soon as a woman has her first child and lasts more than 20 years.

The IFS also highlights that the decline in the hourly pay gap (from 28 per cent in 1993 to 18 per cent today) is largely attributable to an equalisation among the lowest-education (those without A-Levels), and women’s increased educational attainment.

Among the mid- and high-educated the pay gap has remained almost constant over the last two decades, although high-educated women are the most likely to remain in work after having children.

Robert Joyce, IFS associate directors and an author of the report, commented:

“The gap between the hourly pay of higher-educated men and women has not closed at all in the last 20 years. The reduction in the overall gender wage gap has been the result of more women becoming highly educated, and a decline in the wage gap among the lowest-educated.

“Women in jobs involving fewer hours of work have particularly low hourly wages, and this is because of poor pay progression, not because they take an immediate pay cut when switching away from full-time work. Understanding that lack of progression is going to be crucial to making progress in reducing the gender wage gap.”

“Before the first child is born, the employment rates of men and women are almost identical. But between the year before and the year after the birth of the child, women’s employment rates drop by 33 percentage points for those with GCSEs, 19ppts for those with A levels and 16ppts for graduates – while barely changing for men.

By the time that child is aged 20, women’s employment rates still have not caught up again with men’s.”

Angela Rayner, Labour’s shadow women and equalities minister, commented in response to the findings:

“It is unacceptable that the wage gap between men and women with ‘A’ levels or degrees has remained unchanged over the last 20 years. There is no excuse for this – women deserve equal pay for equal work.

“The report also shows that having a child costs women both in their pay packet and in their chances of being promoted. Mothers should not be penalised for having a family.

“Employers must act to ensure women who return to the workplace after having children are not facing discrimination in their salary or promotion prospects.

“I expect a Government led by a female Prime Minister to stamp out such wage discrimination. Theresa May will be judged by her actions on tackling discrimination and disadvantage for other women. She cannot condone this and do nothing.”

Frances O’ Grady, TUC general secretary, pointed to lack of flexible working and unaffordable childcare as likely causes of the pay disparity.

‘It is scandalous that millions of women still suffer a motherhood pay penalty,’ she commented

“Many are forced to leave better-paid jobs due to the pressure of caring responsibilities and the lack of flexible working. Without more well-paid, part-time jobs and affordable childcare, the gender pay gap will take decades to close.’

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