Working fewer hours means earning up to 33 per cent less per hour, says IFS study, with lower-paid women hardest hit
Mothers who return to work are paid up to 33 per cent less per hour than men thanks to their restricted opportunities for promotions and pay rises, according to a new study.
The Institute for Fiscal Studies (IFS) report blames lack of progression at work for a headline gender pay gap of 18 per cent, as mothers tend to work fewer hours.
The average female employee without children earns 10 to 15 per cent less per hour than a man on average, according to the study. But the gap widens consistently for 12 years after their first child is born, by which point women receive a third less per hour, a phenomenon attributed to lack of progression that gradually drags on average earnings.
Robert Joyce, associate director at IFS and an author of the report, said: “Women in jobs involving fewer hours of work have particularly low hourly wages, and this is because of poor pay progression – not because they take an immediate pay cut when switching away from full-time work. Understanding that lack of progression is going to be crucial to making progress in reducing the gender wage gap.”
Female employees who take time away from paid work – mostly to have children – return on an average wage that is 2 per cent lower than their previous earnings, and struggle to keep pace with wage growth among men and non-parents.
The gap is considered most serious for women with lower levels of education and fewer qualifications, who already receive lower pay – but the motherhood pay penalty is financially larger for more highly educated women, at 4 per cent for each year out of paid work.
Shainaz Firfiray, an assistant professor at Warwick Business School, has looked into some of the reasons the gender pay gap still prevails. "Women may take long breaks from work to attend to childcare responsibilities, but long periods away from work reinforce the notion that mothers will have discontinuous careers,” she said.
“Employers may also be less inclined to invest in the training and development of employees who take long breaks and may allocate women to less challenging jobs post-childbirth.
“If employers assume that women are less committed to their jobs because of the presence of conflicting role demands, they are likely to pay them less. As employers tend to reward those workers who are most available to them for productivity purposes, those making use of flexible work options are likely to suffer wage penalties.”
The findings are backed by new research from the Chartered Management Institute, which suggests male employees are 40 per cent more likely to gain a promotion than their female colleagues.
Scotland has the UK's worst gender pay gap according to the IFS study, with women in management roles paid almost £11,000 less on average than their male counterparts. The gender pay gap in the country now stands at 29.2 per cent.
The government’s forthcoming attempt to close the gender pay gap – by making it compulsory for all companies with 250 or more employees to undertake pay audits and publish figures on the gender pay gap in both base salary and bonuses from 2018 – is seen as a less-than-perfect solution by many.
Chris Charman, senior principal at Mercer, said the ‘naming and shaming’ scheme was well-intended but did not go far enough. “We’ve reached a tipping point in society where men and women need to share caring roles outside the workplace, such as childcare, which will influence more equality in workplaces,” he said.
“Alongside becoming more aware of unconscious bias and stereotypes that encourage women to take part-time work, for example, employers need to consider that diversity and inclusion is hugely good for business and not just a ‘nice to have’.”
The IFS study did suggest that the overall gender pay gap is decreasing, from 23 per cent in 2003 and 28 per cent in 1993 to 18 per cent today. But as women typically work for fewer hours a week than men, their take-home pay is even lower, at 36 per cent less per week.