Over the past two decades, families where both parents have incomes have benefited from pay growth, whereas those who rely on the fathers’ income alone have suffered.
Since 1994, the growth in the earnings of working fathers has increased by 0.3% a year on average. Working mothers’ earnings have increased at a rate of over six times more, at 2.2% a year on average.
This is according to new research from the Institute of Fiscal Studies, which concludes that it has become increasingly difficult for families where only the father is working to keep up with other families.
About a quarter of children in the UK come from a family where the income only comes from one parent, which is more or less the same proportion as 20 years ago. However, in 85% of these cases the working parent is a father, meaning many families have not benefited from the increase in working mothers’ incomes.
The incomes of two-earner families are 10% higher than in 2002-2003, but the incomes of single-earner families have not changed. In fact, the average earnings of a working father in a single-earning family are 6% lower in real terms than in 1994-1995.
As a result, 43% of children who live with one working parent and one non-working parent were in relative income poverty in 2015-2016. Just 11% of children with two working parents were in this situation.
A third of children in relative income poverty are from a one-income family, which is up from one in four in 1994-1995. This figure is roughly the same as those with families who have nobody in work.
This is significant because in the mid to late 90s, there was not much difference in the earnings of these two groups. Incomes of one-earner families have only increased at all because benefit and tax credit payments have doubled for this group since 2002.
According to the study, one reason for the slow increase in earnings is because fathers in one-income families are now less likely than fathers in two-income families to be in well-paid jobs. These fathers are also increasingly likely to have been born abroad — 35% for 2015-2016 up from 15% in 1996 — and immigrants tend to earn less than UK born people with the same qualifications.
Also, couples with more children, and with children at younger ages, are more likely to have only one parent in work, often because of childcare responsibilities. However, almost half of one-earner couples have no children under five years old, so it’s not the full story.
“Boosting the incomes of large numbers of families dependent on fathers’ earnings may well be challenging,” said Andrew Hood, a senior research economist at IFS and an author of the report. “The vast majority of the fathers are already working full time, most of the mothers are not actively seeking paid work, and increases in in-work benefits targeted at the group would be likely to further weaken the financial incentive for those families to become dual earners.”
“But increasingly it is a challenge that governments wanting to improve the living standards of low-income children should be considering.”
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