Australian Economy

The cost of being a mother is significantly higher than being a father in Australia

You can’t have a conversation about women’s economic empowerment, safety and participation, without considering this concerning stat: Australian mothers earn less than half of what they were earning prior to giving birth, in the first five years of being a parent.

It’s a figure that’s come in from Treasury economists this week, shared at an Economic Society of Australia conference in Tasmania, and reported across Nine papers today.

And it’s a figure that goes a long way in explaining so much in terms of what’s holding many women back from closing superannuation gaps, as well as from achieving economic empowerment and being able to leave abusive relationships — with Anne Summers’ separate and own research shared over the past week highlighting the impossible choice half a million women in Australia face between poverty and violence.

The motherhood penalty is real. It’s one that is creating limitations for women, as well as for Australia, a country that’s squandering the significant investments being made in educating this segment of the population through barriers to workforce participation.

The research from economists Natasha Bradshaw and Elif Bahar is based on tax office data, as well as data within the Household and Labour Dynamics in Australia Survey.

In analysing how having a first child impacts parents, they found that it’s mothers who pay the ultimate price, with a 55 per cent reduction in income in those first five years for mothers who reduce working hours and take time out of the workforce, when compared to what they were earning prior to giving birth.

There is still a 5 per cent penalty for mothers that do continue to work. Meanwhile, the penalty continues even if mothers significantly out-earn their male partners.

For men, the figures are very, very different. Fathers actually see a slight increase in income leading up to and just after the birth of a child, which flatlines back closer to what they were earning in the year prior to the birth.

Is a penalty just the cost of motherhood?

The fact this same penalty varies dramatically from country to country suggests that there are options available: including around addressing the cost of childcare and enabling more men to take paid parental leave. The researchers reported the penalty to be 36 per cent in the UK and 34 per cent in the United States, compared with Australia’s 55 per cent (although it does balloon out higher in some countries, including Germany, at a massive 70 per cent)

This latest research, yet again, highlights the motherhood penalty in Australia. One that carries well beyond pregnancy, childbirth and early childhood, to an entire lifetime of economic disadvantage that, in many cases, hurts the hardest in retirement.

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