Susan Harkness

The Family Gap in Pay: Evidence from Seven Industrialised Countries

In this paper we use microdata on employment and earnings from a variety of industrialised countries to investigate the family gap in pay - the differential in hourly wages between women with children and women without children. We present results from seven countries: Australia, Canada, the United Kingdom, the United States, Germany, Finland, and Sweden. We find that there is a good deal of variation across our sample countries in the effects of children on womens employment. We also find large differences in the effects of children on womens hourly wages even after controlling for differences between women with children and women without children in characteristics such as age and education. Among the seven countries we study here, the United Kingdom displays the largest wage penalties to children. The family gap in pay is larger in the U.K. than in other countries because of the higher propensity of U.K. mothers to work in low-paid part-time jobs but also because even among full-timers, women with children in the U.K. are lower paid relative to other women than are mothers in other countries. Why does the family gap in pay vary so much across countries? We find that the variation in the family gap in pay across countries is not primarily due to differential selection into employment or to differences in wage structure. We therefore suggest that future research should examine the impact of family policies such as maternity leave and child care on the family gap in pay.

Social and Political Indicators of Human Well-being

Quality of life bears a complex relationship to a wide range of social and political indicators of development. Over recent years, the availability of data has increased appreciably in both the range and number of countries covered. In this chapter, I ask what contribution these indicators can make towards our understanding of human well-being. In so doing, the conceptualization of ‘well-being’ and development is discussed, and how these concepts may be applied to multidimensional approaches to welfare analysis. The issues surrounding the choice of indicator variables, data quality and availability are reviewed, before the interpretation of social indicators is discussed. I then look at issues surrounding aggregating and disaggregating social indicators, and review the literature on political indicators of well-being.

The Household Division of Labour: Changes in Families’ Allocation of Paid and Unpaid Work, 1992–2002

Female employment grew rapidly in the 1990s, and this has accelerated the demise in the numbers of families headed by a male breadwinner. In 2002, three-quarters of married or cohabiting couples, and 56 per cent of those with children under school age, were supported by two-earners. Women in couples where both partners work full-time have always worked long hours, an average 40-hour week in 2002. What has changed over the decade is that there are significantly more of these families. The problem of long family hours of work is most predominant among the highly educated. In 2002 couples where women had some higher education supplied an average of 73 labour market hours a week. In contrast, those with 0-levels or less supplied just 60 labour market hours. This difference is even starker among those with pre-school children. In one-half of families with children at least one parent usually works during the evening, while in one in ten families with pre-school children parents work shifts, with men working during the day and women during the evening or night. In spite of women’s increasing labour market attachment, women still take responsibility for the vast majority of household chores even when they work full-time. The burden of housework is more evenly split where women earn an amount equal to or greater than their partners. These families are also particularly likely to ‘buy back’ time through the purchase of hired help, such as cleaners, and labour saving devices, such as dishwashers.

Welfare Reform and the Employment of Lone Parents

Employment rates for lone parents in the UK in the early 1990s were extremely low, when compared with those in other countries or with married women in this country, at just over 40 per cent. Since 1993 the employment of lone parents has risen by 11 percentage points to reach 53 per cent in 2002. This is more than twice the increase in employment for the population as a whole. The rate of increase in employment was notably faster after 1998 when government policies aimed at raising employment levels of lone parents, the New Deal for Lone Parents (NDLP) and the Working Families Tax Credit (WFTC) came into effect. Analysis presented here suggests that these policies raised the proportion of lone parents who were working at least 16 hours (the level needed to receive WFTC) by just over 7 percentage points, affecting 120,000 lone parents. The number of hours worked by those lone parents already working appears to have been largely unaffected by the policy changes.

The impact of the tax and benefit system on second earners

This article analyses the theoretical and applied aspects of employment disincentives for second earners that exist in the British tax benefit system. The shortcomings of existing tax-benefit income profiles are examined, together with the underlying role of tax credits in disincentives compared with other factors. The potential of such disincentives to worsen employment of second earners in a recession is addressed. Conclusions suggest that a more sophisticated applied approach is required by social policy analysts, together with improved ways to profile incentives in the tax benefit system.

The Economic Consequences of Becoming a Lone Mother

The UK combines one of the highest rates of lone parenthood with one of the lowest rates of maternal employment in the OECD. In this chapter we look at how becoming a lone mother influences women’s economic position using 18 waves of data from the British Household Panel Survey. First, we look at how women’s economic situation is influenced by the transition to first-time motherhood, and second, at the influence of lone motherhood on these outcomes. The outcomes considered are women’s labour market position and household income. We also look at how these demographic transitions influence different income sources. The results suggest that while becoming a first-time mother has a strong influence on employment, with rates of employment and working hours falling substantially upon becoming a mother, lone motherhood has little additional influence. Looking at income, although motherhood leads to a fall in women’s own earnings, within couples these changes are compensated for over time by increases in partners’ earnings and higher child related benefits. For those who become lone mothers, losses in own income combined with the absence of a partner’s income compensating for this loss leads to substantial and sustained falls in income over time.