Parental pay gap tallied
New research shows having a child is significantly more expensive for women than men.
A study by the Grattan Institute shows that on average, when a 25-year-old woman has a child, they can expect to earn $2 million less by the time she is 70 than the average 25-year-old man who becomes a father.
For childless women and men, that lifetime gap is closer to $300,000.
The income gap between mothers and fathers come largely from women reducing their paid work to take on caring and household work.
Grattan’s figures show mothers typically reduce their paid work to take on most of the caring and household work, while fathers tend to continue their paid work and take on some extra caring.
The effect lasts well after the maternity period, with the average mother still doing more caring and twice as much household work as the average father then years after their child is born.
The experts say that when one parent does most of the caring – like learning how to change nappies, what food the child likes, and when nap time is - they become the person for such duties, leaving them with most of the parenting load.
They argue that fathers should be encouraged to take a significant period of parental leave when their baby is born so that they are more involved in caring and other housework years later.
However, the Australian government’s paid parental leave scheme encourages a single “primary carer” model, wherein a primary carer is eligible for 18 weeks of Parental Leave Pay at minimum wage (as well as any employer entitlements).
In 99.5 per cent of cases that leave is taken by mothers. Secondary carer leave is only two weeks at minimum wage.
There are lessons to be learned from Nordic countries, where in Iceland and Sweden, for example, each parent is provided three months’ paid leave and a further three months to divide as they wish.
Emulating such a scheme in Australia would cost the Federal Government at least $7 billion a year, dwarfing the $2.3 billion currently spent on parental leave.
Research has also shown that the parental leave scheme with the highest take-up typically pay 70 per cent or more of the recipient’s normal earnings. Australia’s scheme only pays minimum wage.
The Grattan researchers say there are a number of potential improvements, such as giving parents a more flexible scheme - six weeks reserved for each parent plus 12 weeks to share between them.
This would allow mothers to take the 18 weeks now provided to primary carers, or choose to give fathers more time early on to bond with their child and develop their parenting skills.
If paid at minimum wage, it would cost at an extra $600 million a year at most.
The experts say making childcare more affordable would also deliver more bang for buck.
“More fathers taking parental leave is also worthwhile in its own right, promoting greater sharing of the unpaid workload within families and giving fathers more time with their kids,” the Grattan team says.