Mothers take 4.4% wage cut to have a baby, research reveals

Author
Simon Collins, NZ Herald,
Section
National,
Publish Date
Tuesday, 29 May 2018, 6:50AM

Mothers take an average 4.4 per cent pay cut to have a baby, a new study has found.

But parents earn more than non-parents and the pay "penalty" suffered by women gets worse the longer they take time off to rear children.

The study, by three economists for the Ministry for Women, is believed to be the first in the world to measure incomes of a whole population of men and women from five years before their first baby to 10 years afterwards, using Statistics NZ's data.

Its headline finding is that having a baby reduced mothers' hourly pay rate by 4.4 per cent, after adjusting for their previous pay and all other factors in the database.

This is a smaller "motherhood penalty" than calculated in previous studies which did not have such comprehensive data.

The pay cut or "penalty" of having a baby, compared with what the same women would have been expected to earn if they didn't have children, was a statistically insignificant 2.3 per cent for new mothers who returned to work within six months.

It was 6.6 per cent for mothers who went back to work within seven to 12 months, and 8.3 per cent for those who went back after more than a year.

Gail Pacheco says previous studies have found

Gail Pacheco says previous studies have found "motherhood penalties" generally below 20 per cent in developed countries. (Photo / NZ Herald)

In contrast, the "fatherhood penalty" - the cost of having a baby for fathers - was less than 1 per cent and statistically insignificant.

One of the authors, Dr Isabelle Sin of the Motu research unit, said the gender contrast was mainly due to women being much more likely to take time off and then return to work only part-time.

On average, new mothers took 16 months off work after having their first baby.

Men worked a steady median of 41 hours a week throughout the 15 years of data, but women's median paid hours dropped from 40 hours before pregnancy to 27 hours two years after childbirth, and remained 27 hours until the end of the study period.

"So if you want to close the gender pay gap, we need to think about why more women than men take time out," Sin said.

"We need to think about how to make workplaces more family-friendly, and employers need to ask themselves whether they are subconsciously biased towards expecting women to take time out.

"I'm not sure that total equality should be what we are aiming for, because I guess my feeling is that a lot of women are likely to want to take time off to raise their children.

"But that should be a personal or couple choice rather than because culturally it's what's done, it shouldn't be because being a stay-at-home dad is 'weird'."

She said it was great to see Prime Minister Jacinda Ardern's partner Clarke Gayford planning to stay home to look after the couple's first baby, which is due next month.

"The more people like him, the better," she said.

Another author, AUT Professor Gail Pacheco, said previous studies had found a wide range of motherhood penalties, "usually falling below 20 per cent for developed countries and larger for developing economies".

In a one-off snapshot using June 2016 data, Statistics NZ found that the gender pay gap was much wider for parents than for non-parents - a 17 per cent gap between mothers ($23.44 an hour) and fathers ($28.25), compared with a 5 per cent gap between childless women ($21.41) and men ($22.54).

The latest study found that parents earned more than non-parents even after adjusting for ages and all other characteristics, especially for men.

"Men who will in future become parents earn on average 14.3 per cent higher hourly wages than men of the same age who will not become parents," it found.

"That is, fathers are strongly positively selected from the population as a whole."

Future mothers earned 7.8 per cent more than women who would not become mothers, suggesting that high income also boosts a woman's chances of becoming a mother but much less than for men.

Siouxsie Wiles (centre, with daughter Eve and husband Professor Steven Galbraith)says men are taken more seriously than men in many fields. Photo / Doug Sherring

Siouxsie Wiles (centre, with daughter Eve and husband Professor Steven Galbraith) says men are taken more seriously than men in many fields. (Photo / Doug Sherring)

Scientist Dr Siouxsie Wiles felt it was a "slap in the face" when a potential employer asked at her job interview about how the job would affect her family.

She had already been a lecturer at Imperial College, London, and had won awards for her work as a research fellow for four years at the University of Auckland, when she finally had the chance to apply for a permanent lectureship at the university.

"When I had an interview for my position, one of the questions I was asked was how was I going to stop the stress of this job affecting my family," she said.

"That was the first time I had been slapped in the face with 'you are a woman and you are a mother'. It was a real eye-opener to how some of the people who I work for and with, how they view me.

"In that particular case, I got my job. But it points to a culture."

Wiles, who heads the university's Bioluminescent Superbugs Lab, came to New Zealand in 2009 because her husband, NZ-born mathematician Professor Steven Galbraith, applied for a job at the University of Auckland.

"He was told there was a position and he should apply for it," she said.

New to the country, Wiles applied for a Health Research Council fellowship and won it, but at a much lower salary than she had earned in London.

Although the couple's daughter Eve was then only 3, the fellowship was fulltime and on a standard university salary scale. But Wiles said: "I was put on a lower level than I should have been."

She said Galbraith had never been asked about his family at a job interview.

"It certainly feels like fatherhood doesn't affect men as much as motherhood affects women," she said.

"It's very hard to pin down specific instances, but it's interesting that overall there is this gender gap [in pay]. That's partly because you are taken more seriously as a man than as a woman."

 

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