tutor2u | The Pay Penalty for Having Children

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The Pay Penalty for Having Children

Graham Watson

4th January 2017

More labour market economics, with a Resolution Foundation report looking at gender inequality, highlighting that the gender pay gap is only 5% for workers in their 20s but rises for workers in their 30s and 40s.

The argument is that having a child carries a "sharp and long-lasting" pay penalty.

However, the case isn't straightforward. Last year, IFS research suggested that there were other reasons that contributed to this divergence: more women of child-bearing age work in part-time jobs than men and, on average, part-time jobs carry lower pay rates than full-time jobs. And bear in mind that some of the women in these jobs will have chosen to work part-time.

So whilst I don't doubt that there's inequality in the labour market: you need to be careful about flagging up its causes.

Revision video on the gender pay gap

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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