The Effect of Motherhood and Lone Motherhood on the Employment and Earnings of British Women: A Lifecycle Approach

Abstract

This article examines the effect of becoming a first-time mother and subsequent, or concurrent, transitions to lone parenthood on women’s employment and wages. Using longitudinal British Household Panel Survey data and fixed-effect models we find the arrival of a first child to have a substantial effect on employment and wages (n = 1,133 individuals; 13,369 observations). Employment rates fall 20 percentage points (ppt), and fulltime employment 44-ppt, following a first child’s birth and do not recover with time. Mothers that remain in work also see a sharp drop in the rate of wage growth following childbirth. Yet, in spite of predictions that lone mothers may face greater difficulties combining work and childcare, and therefore suffer greater labour market penalties than mothers with partners, we find little evidence of additional penalties to lone motherhood. There is some evidence of heterogeneity in the relationship between motherhood and employment outcomes by education. Overall we conclude that addressing the problems of low employment and earnings among British lone mothers will require policymakers to deal with the high economic cost of motherhood.