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Women take a pay cut to have a baby

Friday, Jun 1, 2018, by Sheryl Blythen

Working mothers face 4.4 percent lower hourly wages than they could have expected if they hadn’t had children, new research shows.

The Parenthood and Labour Market Outcomes study found that when men become parents, their hourly wages weren’t significantly affected.

“New Zealand is similar to the rest of the world in that the gender pay gap is larger among parents than people without children,” says Dr Isabelle Sin, Fellow at Motu Economic and Public Policy Research and co-author of the new paper.

“The impact of parenthood is especially noticeable for women who were in a high-income bracket before giving birth and who returned to work quickly after becoming parents,” she says.

“Prior to parenthood, these women experienced rapid income growth - they were on a trajectory to be very high earners. After they returned to work, often with reduced hours, their earnings were lower and grew at a crawl. This dampening of the income growth of top-earning women helps explain why relatively few women appear in the highest income brackets in New Zealand.

“A fast return to employment did have some benefits, though: their hourly wages didn’t fall as much as the wages of their slower-returning colleagues.”

You can listen to Dr Sin talking with Kathryn Ryan about the study on Radio New Zealand’s Nine to Noon programme. 

Equal Employment Opportunities Commissioner Dr Jackie Blue told Newshub the results of the study are disappointing and action must be taken. Download an executive summary of the research here.

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