Mothers miss out on £66,000 of earnings in the decade after having a baby

Women who have a baby miss out on over £66,000 in wages during the following decade, according to a new analysis of earnings data.  

The Social Market Foundation, a think-tank, has found that a woman who had her first child in 2010/11 typically suffered a cumulative income loss of £66,434 over the following nine years, compared to what would have happened if she had not had children. 

The SMF states that many women experience this income drop due to a lack of affordable childcare. “In the UK, having a child is expensive – particularly for women. With childcare costs prohibitive, many either have to stop working, or work reduced hours, in order to look after children,” Scott Corfe, SMF Research Director, said in a statement.

“ This means derailed career paths, missed promotion opportunities, and tens of thousands of pounds of foregone earnings over the course of a decade.” 

UK families pay the third-highest childcare costs in the developed world, according to OECD data. The UK does not have state-funded or heavily-subsidised nurseries, in contrast with many other countries. Instead, working parents with pre-school children have to pay huge sums for private nurseries or childminders. Even once children are old enough to go to school, parents often still have to pay for pre-school and after-school care, because the school day is much shorter than a typical work day.

As a result, two-thirds of families say their childcare costs are equal to or more than their rent or mortgage, according to a survey published in March by Pregnant Then Screwed and Mumsnet, two campaign groups. While some families can rely on grandparents to help look after children, this is only an option if relatives live locally, are not still working themselves, and are healthy enough for the task.

The SMF published its new analysis on Monday as it launched a cross-party commission on childcare. The commission, which will be led by both Conservative and Labour MPs, will work with the SMF to analyse how Britain’s childcare set-up impacts wages and poverty. It will also consider ways to improve this situation. 

The SMF analysis looked at women who were 25-35 in 2009/10 and found that the typical woman who did not have children saw her earnings rise by around third over the subsequent decade. By contrast, a woman who had her first child in 2010/11 was earning 10% less a decade later.  The analysis used the Understanding Society dataset, which tracks the experiences of around 30,000 people over decades. 

The UK’s childcare costs have come under a spotlight in recent months, as families struggle with the cost-of-living crisis. “No government can claim to have solved the cost-of-living crisis…if the costs of childcare remain unaddressed,” Corfe said. “This is a national problem that needs a national solution, and our new cross-party commission will provide some answers to deliver the high-quality and affordable childcare that Britain needs.” 

The SMF’s latest analysis has focused on mothers’ incomes because the economic impact of having children still falls most heavily on women. Previous SMF analysis of fathers’ incomes has found that male working hours and wages typically increase after the birth of a first child. The SMF has argued that more men should work part-time, to spend more time on childcare and to allow more mothers to increase their working hours.

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