Sunday, 19 June 2016

Why having two children can provide a Father’s Day pay bonus

Being a parent can dramatically alter salaries – but new IPPR research also shows that the effect depends on where you live and how many children you have

Today is the one day of the year when perhaps dad can expect to take it easy and bask in the adulation of his family. But maybe he should use Father’s Day to thank his offspring for what they have done for him – and apologise to his wife for the effect they have had on her finances.

The curious phenomenon of the “father bonus” was first identified four years agoby the Institute for Public Policy Research, which analysed the link between parenthood and wages for those with full-time jobs. It found that being a parent brings a wage “penalty” for women, and a wage “bonus” for men. Now the thinktank has produced analysis that explores the phenomenon in detail and suggests there are significant variations according to the father’s socio-economic background.

For fathers in the north, the bonus is 18%, compared with 22% for those in the south. On average, the bonus for a dad in the private sector is 18% and in the public sector is 21%. Fathers with degrees can expect a bonus of 23%, compared with those without a degree, who can expect to earn 16% more.

Dads also experience a bonus for having two or more children, above and beyond that of being a father of one child. The findings are in stark contrast to the experience of working mums.

Women who become mothers before 33 typically suffer a 15% pay penalty compared with women without children. “On Father’s Day, it is great to celebrate the fact that fathers in the UK are playing a more active role in their children’s lives than ever before,” said the IPPR’s associate director, Clare McNeil. “More dads are now likely to see parenting as central to their identity, and to appreciate the benefits of parenthood. But we have been slower as a society to reflect these changes at home and in the workplace.”

Experts are divided on the reasons for the fatherhood bonus. There is some evidence that, on becoming a father, men increase their earning capacity because they feel a greater responsibility to be the breadwinner, and to compensate for their partner’s reduced earnings.

Labour market figures show that men with children work slightly longer hours on average than those without. In contrast mothers, even those in full-time jobs, tend to work shorter hours than similar women without children.

Other research suggests that fatherhood is valued by employers because of the perceived loyalty it may bring. Research in the US found that CVs from fathers were more highly scored than identical ones from non-fathers, while the opposite effect was observed in women’s CVs. A survey by the Fawcett Society found that three in 10 Britons think men are more committed to their job after having a baby – and nearly half of respondents think women are less committed after having children.

“Countries that offer affordable, high-quality childcare, parental leave equally shared between mum and dad, and flexible work for both women and men, do better in helping parents balance work and care,” she said. “UK employers and policymakers need to catch up and reflect both parents’ aspirations to spend more time with their children.”Some men will want to work longer hours on becoming a father, she said, perhaps to make up for their partners working fewer hours. But with dads playing a more active role in their children’s lives, others may want to request flexible working or time off to balance work and family life.

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