Children are key factors in gender pay gap

Chasm in Scandinavia is similar to divide in Canada and U.S., new research shows

Scandinavia is supposed to be a family-friendly paradise. We imagine fathers and mothers spending their children’s early months together at home. Then they enrol them in highquality, government-subsidized child care, from which they pick them up at the end of the world’s shortest workdays.

But it is not as egalitarian as the fantasy suggests. Despite generous social policies, women who work full time there are still paid 15 per cent to 20 per cent less than men, new research shows — a gender pay gap similar to that in Canada and the United States.

The main reason for this pay gap seems to be the same in both places: Children hurt mothers’ careers. This is, in large part, because women spend more time on child rearing than men do, whether by choice or not.

A series of recent studies shows that in both North America and Europe, the gender pay gap is much smaller until the first child arrives. Then, women’s earnings plummet and their career trajectories slow. Women who do not have children, by and large, continue to grow their earnings at a similar rate to men. There are still differences because of discrimination and other factors, but researchers say that motherhood explains a large amount of the gap.

It’s another sign that in modern economies, with their two-income families and with a priority on long hours spent in the office, even countries with the most family-friendly policies haven’t made things equal.

Policies such as paid leave, subsidized child care and part-time work options are helpful to mothers. Scandinavia has one of the highest rates of women’s labour-force participation in the world, and the share of women working in the United States has fallen behind the share in Canada and Europe, which have much more generous policies.

But policy alone would not be enough to overcome gender inequality. It would require changes in behaviour — including by men. There is evidence that the gap would shrink if fathers acted more the way mothers do after having children, by spending more time on parenting and the related responsibilities.

“At the very least, men have to take a larger role,” said Francine Blau, an economist at Cornell University who has studied the gender pay gap and family-friendly policies in the United States and Europe.

“It does become a distinction in the eyes of employers between potential male and female workers, and it may reinforce traditional gender roles.”

One new study, which used a data set including everyone in Denmark from 1980 to 2013, along with details about their jobs and families, found that while there was a pay gap before people had children, it was relatively small and earnings were increasing at similar rates.

But after the first child, women’s gross earnings quickly dropped 30 per cent and never fully recovered. In the long term, mothers earned 20 per cent less. Women who did not have children continued to increase their earnings at a rate similar to men.

Most studies of the pay gap analyze equal pay for equal work. But in this paper, researchers examined how women changed their work in response to having children, and how that affected their lifelong pay. Mothers were paid less partly because they worked fewer hours, took longer breaks from employment and were more likely to move into lowerpaying, family-friendly jobs, the paper found.

Their probability of becoming a manager also declined.

“Equal work is, in practice, not an option for most women, because they have to take care of the children and therefore have different kinds of jobs and different kinds of hours,” said Henrik Kleven, an economist at Princeton University who wrote the paper with Jakob Egholt Sogaard, an economist at the University of Copenhagen, and Camille Landais, an economist at the London School of Economics.

As in the U.S. and Canada, the pay gap in Denmark has shrunk over time as women have become better educated than men and more likely to be professionals or managers. Children, which accounted for 40 per cent of the pay gap in 1980, now account for 80 per cent of it. Discrimination and other factors play a role in the remaining gap, researchers say.

The same pattern is true elsewhere. In the United States, a study by Census Bureau researchers found that between two years before the birth of a couple’s first child and a year after, the earnings gap between oppositesex spouses doubles.

The gap continues to grow for the next five years.

Two studies of college-educated women in the United States found that they made almost as much as men until ages 26 to 33, when many women have children. By age 45, they made 55 per cent as much as men.