Worsening of gender wage gap one of the penalties of becoming a mother

May 29, 2018

The most famous mother-to-be in the country is due to give birth in less than a month, after which she plans to head back to work and her prime ministerial salary. That’s not the norm for most women, however, and research released today shows that motherhood generally still comes at a significant price for women.

“New Zealand is similar to the rest of the world in that the gender pay gap is larger among parents than people without children,” said Dr Isabelle Sin, Fellow at Motu Economic and Public Policy Research and co-author of the new paper.

“Across our sample, the hourly wage difference was 5.7 percent between similar men and women without children, but 12.5 percent between men and women who were parents,” said Dr Sin.

“The impact of parenthood is especially noticeable for women who were in a high-income bracket before giving birth and who returned to work quickly after becoming parents,” said Dr Sin.

“Prior to parenthood, these women experienced rapid income growth--they were on a trajectory to be very high earners. After they returned to work, often with reduced hours, their earnings were lower and grew at a crawl. This dampening of the income growth of top-earning women helps explain why relatively few women appear in the highest income brackets in New Zealand. A fast return to employment did have some benefits, though: their hourly wages didn’t fall as much as the wages of their slower-returning colleagues.”

In contrast, low-income women, such as young mothers, experienced small monthly income decreases with parenthood and similar income growth rates before and after having children.

“This isn’t necessarily a positive sign, as it could merely indicate that they were underemployed before motherhood,” said Dr Sin.

When men became parents, their hourly wages weren’t significantly affected. Women, on the other hand, faced 4.4 percent lower hourly wages than they could have expected if they hadn’t had children.

“This wage penalty for motherhood varied substantially. The longer mothers stayed at home, the bigger the drop in their hourly wages, with women who were out of paid work for more than a year experiencing an 8.3 percent wage penalty. Only some of this drop in pay can be explained by mothers moving to lower-paying jobs,” said Dr Sin.

Before becoming mothers, Māori and Pasifika women were far more likely not to be employed than Pākehā women, but this gap narrowed in percentage point terms after they became mothers. Pākehā mothers have a 59% employment rate in their child’s tenth year compared with 41% for Pasifika mothers and 45% for Māori mothers.

“On a more positive note, monthly income for Māori, Pasifika and Asian mothers in paid employment was slightly higher two years after their child’s birth than it was two years before,” said Dr Sin.

“Our research shows that parenthood exacerbates pre-parenthood gender wage gaps and this seems closely connected to women working less after they have children. I believe it will be hard for New Zealand to achieve gender equality in the labour market until it is just as common for a dad to stay home and take care of his children as it is a mum. Hopefully Jacinda and Clarke’s example will help spur cultural change in this direction,” said Dr Sin.

The study, “Parenthood and labour market outcomes” by Isabelle Sin (Motu, Victoria University of Wellington, and Te Pūnaha Matatini; Kabir Dasgupta (Auckland University of Technology and the New Zealand Work Research Institute); and Gail Pacheco (Auckland University of Technology and the New Zealand Work Research Institute) received funding from the Ministry for Women.

Summary haiku
Being a mother
Means decreased hours and wages.
No such change for dads.