The Economic Consequences of Becoming a Lone Mother

Abstract

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.