Effects of childcare responsibilities on women’s income and career
Having one or more children appears to have a clearly negative impact on mothers in terms of their income, labour market integration and career. This is the main conclusion of an analysis of social security data commissioned by the Labour Market Service in Austria. Moreover, the income disadvantages experienced by women due to childcare responsibilities during the first phase of their labour market trajectories does not appear to be compensated for during the later stages of their working life.
About the study
On the basis of quantitative social security data (anonymous individual data), the Austrian Labour Market Service (Arbeitsmarktservice, AMS) commissioned a study (in German, 160Kb PDF) which investigated the effects of having children and the childcare responsibilities of parenthood on the labour market integration of women and the development of female income levels. The so-called ‘childcare effect’ is analysed by comparing women of three different age groups – that is, those aged 25, 35 and 45 years – and by taking into consideration women’s age at childbirth – more specifically, women who gave birth to their first child before or after their 26th birthday.
The selection of and comparison between these three different age groups aims to, on the one hand, illustrate the effects of motherhood during three major phases of female labour market trajectories. At the same time, it seeks to analyse the developments and processes over a certain period of time.
Effects during job-entry phase of working life
The study first looked at women aged 25 years, with a focus on mothers who gave birth to their first child before their 26th birthday. In terms of labour market integration, the study reveals that, at the age of 25 years, 30% of all young mothers were not economically active, while 7% were unemployed and a further 30% were insufficiently integrated in the labour market (Figure 1). Therefore, only about a third of young mothers can be seen as well integrated in the labour market: 20% of whom are mostly integrated and only 12% of whom are fully integrated. For women aged 25 years without children, the distribution is almost the opposite, with nearly 70% of them being fully or mostly integrated. In this context, it is worth mentioning that the proportion of women with only a compulsory education is significantly higher (36%) among young mothers than among young women without children (24%).
Figure 1: Labour market integration of women aged 25 years with and without children, 2005 (%)
Note: The study used the following typology of labour market integration during a year for permanent full-time employment: 100% = fully integrated; 50%–99.9% = mostly integrated; 0.1%–49.9% = insufficiently integrated; 0% = not integrated, unemployed or not economically active.
Source: AMS, Synthesis research, 2007
Labour market integration of women aged 25 years with and without children, 2005 (%)
In addition, temporary exits from the labour market and part-time work result in lower annual earnings for young mothers. In terms of annual median income, young mothers earn only a third (€6,130) of what their childless peers of the same age earn (€18,870). This wage gap is the same for all educational levels.
These results point to the significant difficulties which young women with childcare responsibilities are facing in entering the labour market. It is interesting to observe whether this gap is reduced over the subsequent 10 years.
Effects during consolidation phase of working life
Almost two thirds of all children are born to women aged between 25 and 35 years. This age therefore marks the main period when women in Austria start a family. Looking at women aged 35 years, the findings show that women who have given birth to their first child within the previous nine years were better integrated into employment and better paid at the age of 25 years than other women.
After childbirth, however, this advantage is not maintained and, 10 years later, women with children appear to be more disadvantaged in the labour market. At the age of 35 years, the income level of mothers is just half of that of women without childcare responsibilities (Figure 2). Whereas women without children managed to continuously raise their income level during this 10-year period, mothers experienced a decrease when comparing the findings for 2005 with those for 1995.
Figure 2: Annual medium income of women in standard employment with and without children, up to 35 years of age, 1995–2005 (€)
Source: AMS, 2007
Annual medium income of women in standard employment with and without children, up to 35 years of age, 1995–2005 (€)
Effects at peak level of employment biography
Looking at the occupational situation of mothers aged 45 years, the study addresses the question of whether the negative impact of childcare responsibilities is only a short-term phenomenon of mothers’ labour-market trajectories or must be regarded as having a lasting effect. In terms of income level, the study identifies a visible advantage for childless women at the age of 45 years (Figure 3).
Figure 3: Annual median income of women aged 45 years, with and without children, 2005 (€)
Source: AMS, 2007
Annual median income of women aged 45 years, with and without children, 2005 (€)
The extent of the wage gap depends on the age women were when they had their first child and the number of children they have. Women with two or more children earn 23% less than those without children, while women who gave birth to their first child before the age of 26 years earn €2,000 less a year than those who gave birth to their first child at an older age. This is true for all educational levels, although the gap is smallest between university graduates (7%) and widest between women with a secondary education and vocational school diplomas (25%).
The study clearly shows that the income disadvantages experienced by women due to childcare responsibilities during the first phase of their labour market trajectories cannot be compensated for during the later stages of their working life. Thus, childcare responsibilities appear to have a lasting negative impact on income levels across women’s entire career.
Manfred Krenn, Working Life Research Centre (Forschungs- und Beratungsstelle Arbeitswelt, FORBA)