Working mothers in Australia see earning power diminished

A “motherhood penalty” sees earnings fall by an average of 55% in the first five years of parenthood, according to new analysis by Australia’s Treasury.
By: | October 12, 2022

This is due to women taking time out of the workforce or working fewer hours after the arrival of their children.

The research also found some evidence that mothers who remain employed earn 5% less per hour than they would have done had they not had children, “though the estimates are imprecise and only just significantly different from zero”.

In contrast, men’s earnings are unaffected by entry into parenthood, said the Treasury, who added that the motherhood penalty was “persistent for at least a decade into parenthood” and was the same regardless of a woman’s breadwinner status before having children. “This is the case even for women who significantly out-earn their partner,” researchers said.

“Furthermore, highly educated women experience a larger penalty, despite the higher opportunity cost of reducing their participation, suggesting again that choices around work and care are not always responding purely to financial considerations.”

The analysis also found that neither men nor women are satisfied with their balance between family and work after having children.

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Fathers with young children are more likely than mothers to say their work affects their family life, while mums are more likely than dads to say their family life affects their work.

The research used data from the Australian Taxation Office and the Melbourne Institute’s Household, Income and Labour Dynamics in Australia survey, reported Financial Review.