New data shows just how badly women’s earning power suffers after having a child, with the gender pay gap widening from just 10% to 33% after the arrival of a son or daughter.
A study by the Institute for Fiscal Studies (IFS) found that while the gap between what women and men earn has been steadily falling over the last 20 years, women are still paid around 18% less per hour than men. That is down from a 28% pay gap in 1993.
Interestingly, the wage gap is smallest when people are younger, but begins to open up significantly once women reach their late twenties.
The IFS concludes that “differences in career patterns stemming from the birth of children have a key role to play in explaining the evolution of the gender wage gap across the life cycle.”
The IFS says:
“There is, on average, a wage gap of over 10% even before the arrival of the first child, but this gap appears fairly stable until the child arrives and is small relative to what follows,child arrives, there is a gradual but continual rise in the wage gap over the following 12 years, until it reaches a plateau of around 33%.”
The report looks at average hourly wages, not annual salary, so corrects for the bias of women working less after childbirth.
The IFS concludes that the reason women earn less than men as they get older is because the child care responsibilities overwhelmingly fall to women who have to leave their jobs to look after the kids. That means they spend less time climbing the career ladder and gaining experience.
The IFS says: “As women are likely to do less paid work after the arrival of children, the level of labour market experience they have falls further and further behind that of their male counterparts, and the wage gap therefore widens.
“By 20 years after the birth of their first child, women have on average been in paid work for four years less than men and have spent nine years less in paid work of more than 20 hours per week.”
In short, the IFS says, the significant gender pay gap in later life could come down to “mothers missing out on promotions” because they only work part time or haven’t accrued enough experience.
The report also found:
- When comparing men and women with A-Level and Degree qualifications, the gender pay gap is more or less the same as it was 20 years ago. It is only for those with GCSE level and below qualifications that the difference between what men and women get paid had shrunk.
- When women return to work after childbirth, hourly wages are on average 2% lower for every year they spent out of work.
- Women who return to work part-time jobs suffer from a lack of wage progression, with hourly earnings doing little more than rise in-line with the economy.
Robert Joyce, Associate Director at IFS and an author of the report, said: “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.”