Dutch Women Will Earn 46% Less Because of Child Penalty
In the Netherlands, a mother loses almost half her income seven years after giving birth to a child compared to women who don’t have child. In a country with a widespread part-time work culture, mothers working fewer hours after childbirth is the main driver of what is called the child penalty.
The Netherlands Bureau for Economic Policy Analysis calculated what is called the “child penalty” or “motherhood penalty“, i.e. the loss of income women suffer from their motherhood. By using national administrative data, it predicted the potential loss of income for parents when children were born between 2005 and 2009 and evaluated its causes.
And mothers’ earnings are 46% lower compared to their pre-birth earnings trend. On the other side, fathers’ earnings are unaffected by childbirth. The study suggests that the child penalty is mainly due to the fact that women reduce their working hours while men don’t, in a country where the part-time work culture is prevalent.
In the Netherlands, men earn 13% more than women in 2018. The overall gender gap is close to the OECD average, more than Denmark’s 4.9% but less than the 18.5% of the United States. But the study shows that, even if a gender gap exists between men and women before childbirth, the evolution of the income follows the same trend. However, the gap widens after childbirth. Fathers continue on their trends while mothers first see a decline in revenue and then have a flatter earning evolution after childbirth.
Part-time work culture, which once improved gender equality, now increases child penalty
After seven years, mothers would therefore earn 46% less than the predicted earnings if she didn’t have child. Fathers earn a little less after childbirth, but the overall income reduction fades away 7 years later. After two years, the penalty is already 35% compared with the absence of a child. The reason lies in the fact that women reduce their working hours at childbirth.
In the Netherlands, part-time work is a widespread norm with a one-and-a-half earner household model. With 20% of men working part-time, Dutch men are twice more likely to adopt this work schedule as the OECD average. But the norm is even more prevalent among women. As a consequence, the ratio of people working part-time is 38 percentage points higher among women than men. It is the highest gender gap in part-time work among the OECD members.
Yet, part-time work was implemented in the 1960s in the Netherlands for women to join the labour market in the context of a workforce shortage. But what has once contributed to reducing gender inequality would nowadays inhibit gender equality the study suggests. In fact, almost a third of adult women are not financially independent when only 20% of men cannot financially live by themselves.
Childcare access has modest short-term benefits
In 2005, government initiatives unified subsidies and increased access to childcare. Nevertheless, increase childcare access proved to have small short-term benefits in reducing the loss of income for mothers. Women lost 6.5% less of their predicted income due to the increased access of childcare, which accounts for a 750€ gain annually. But if the immediate benefits are modest, the report suggests that there are more complex relations with long-term impacts that are hard to capture in the strong correlation between childcare accessibility and a lower child penalty.
The child penalty in the country is relatively high; but the penalty is widespread among states. In Denmark and Norway, the loss of income is about 20%. In Spain, Sweden, Finland or France, it is about 30%. In Austria and the United Kingdom, the child penalty is more about 45-50%, while it reaches 60% in Germany (child penalty rates among countries are pulled from different birth years).
Unlike a research conducted for Spain, results show that “socio-economical determinants such as educational attainment” don’t drive child penalty but rather suggest that cultural gender norms are likely to be an important driver in the Netherlands. It also found that the higher a family is religious, the higher the child penalty.
Because the reduction of working hours in the Netherlands is highly skewed by gender, data also proves that the child penalty among homosexual mothers is a third smaller than in heterosexual couples.
- The Child Penalty in the Netherlands and its Determinants, CPB Netherlands Bureau for Economic Policy Analysis, June 2021, Free access