Forgone income and motherhood: What do recent British data tell u?

Abstract

Children affect women s opportunities in the labour markets of most advanced countries in three ways: an immediate effect on employment, and effects on longer term earning power and pension coverage. This paper quantifies these impacts on women s lifetime income for hypothetical illustrative British cases. New results, based on data collected during the 1990s, are compared with estimates from 1980. Although childrearing and employment have increasingly been combined over the period, the estimated loss of gross earnings associated with motherhood remains substantial. It still amounts to around half potential earnings post childbirth for less qualified sections of the British female labour force, but has become smaller for highly qualified women. The paper examines the effect of the tax/benefit system on the costs, and makes some assumptions about the distribution of net costs between mothers and fathers. It also shows how far motherhood jeopardizes financial security in old age, particularly for the least qualified.