following lives from birth and through the adult years www.cls.ioe.ac.uk

Jenny Neuburger, Heather Joshi & Shirley Dex

GeNet meeting, 26-27 March 2009

Part-time working and pay amongst mothers of the Millennium Cohort

Research questions

Is there a pay penalty to working part-time amongst the mothers of the Millennium Cohort?

Did legislation and changes in employer practice in around 2000 reduce the pay penalty associated with reducing hours?

Does remaining with the same employer reduce the penalty associated with reducing hours of work?

Changes to legislation affecting PT pay

National Minimum Wage (1999) From 1st April 1999, legal minimum covering all employees. As

of October 2008, adult rate was £5.73 an hour. 18-21 rate was £4.77.

Part-Time Workers Regulations (2000) From July 2000, “A part-time worker has the right not to be

treated by his employer less favourably than the employer treats a comparable full-time worker” – covers rates of pay and conditions of employment. Allows return to part-time work after maternity leave.

Right to Request Flexible Working (2003) From 6 April 2003, parents of children aged under 6 (or of

children with disabilities under 18) were given right to apply to work flexibly. Employers have a duty to consider applications seriously. Main request has been to reduce hours.

Evidence to date: PT/FT average pay ratios

75 %

80 %

85 %

90 %

95 %

Joshi & Paci, NCDS 1991, mothers

Ermisch & Wright, WES 1980

Connolly & Gregory, NESPD 1975-2001

Manning & Petrongolo, LFS 2001-2003

Unadjusted ratio

Adjusted ratio

PT as % FT pay

Mothers of the Millennium Cohort Study (MCS)

Mothers who gave birth across UK between September 2000 and January 2002 (up to August 2001 in England and Wales)

Over-sampled children in wards with higher rates of poverty and higher proportions of ethnic minorities (weights used)

Three surveys so far - when cohort baby nine months, three years old and five years old (2001/2, 2004/5, 2006)

12,702 mothers have responded at all three sweeps (around half of sample are first-time mothers)

4,374 mothers have been in paid employment at all three sweeps

% MCS mothers in paid work (N = 12,702)

40 %

60 %

20 %

% of mothers employed (inc. self-emp)

Age of Cohort child

9 months (2001/02) Age 3 (2004) Age 5 (2006)

% employed MCS mothers working part-time

9 months (2001/02) Age 3 (2004) Age 5 (2006)

40 %

80 %

60 %

20 %

Age of Cohort child

% of employed mothers working part-time

Reasons for returning to paid work at 9 months (MCS 1)

20 %

Full-time at 9 months Part-time at 9 months

Family needed income*

Had used up maternity leave/pay*

Preference*

40 %

*Multiple answers allowed

PT median pay as % FT pay (MCS cross-sections)

80 %

60 %

50 %

▲

▲

▲70 %

PT as % FT median pay

Age of Cohort child

9 months (2001/02) Age 3 (2004) Age 5 (2006)

Distribution of qualifications by employment status, MCS 1

Employed FT Employed PT Not in paid work

No quals/NVQ1

NVQ2 (GCSE/O-level)

NVQ3 (A-level)NVQ4 (Diploma/Degree)

Overseas and other qualification

10 %

30 %

20 %

40 %

50 %

60 %

Wage patterns of MCS mothers employed at all three surveys, n = 2075

Full-time each sweep

Part-time each sweep

Hourly wage (2000 prices)

£12

£10

£9

£8

FT at sweep 1 followed by PT at least once

PT at sweep 1 followed by FT at least once

9 months (2001/02) Age 3 (2004) Age 5 (2006)

Full-time each sweep

Part-time each sweep

Wage patterns of MCS mothers, same employer since pregnancy

£12

£10

£9

£8

FT at sweep 1 followed by PT at least once

PT at sweep 1 followed by FT at least once

Hourly wage (2000 prices)

9 months (2001/02) Age 3 (2004) Age 5 (2006)

Wage patterns, highly-qualified, same employer since pregnancy

£9

Full-time each sweep

Part-time each sweep

FT at sweep 1 followed by PT at least once

PT at sweep 1 followed by FT at least once

£14

£11

£10

£12

Hourly wage (2000 prices)

Age 5 (2006)Age 3 (2004)9 months (2001/02)

Possible real and confounding effects

Real effects:

Less wage growth in part-time jobs relative to full-time jobs

Positive effects of remaining with same employer since pregnancy on wage growth (associated with working FT)

Confounding effects:

Selection effects - FT workforce has characteristics associated with higher wage growth (except for group of `switchers’ working FT at 9 months out of financial necessity?)

Impact of having another baby on wage growth

Is gap explained by ‘confounding’ characteristics?

Restrict sample to mothers…

…for whom cohort birth is first birth (= 5,025)

…and who were working during pregnancy (= 4,251)

Test effects FT/PT working (inc. PT spells by sweeps 2 & 3)

Match groups on basis of highest qualification, ethnicity, age of mother, region (at sweep 1) and subsequent births at sweep 2 or 3. Since 1st birth sample, age of oldest child is constant.

Match (using propensity-score) for:

1) Cross-section employed at any survey and

2) Longitudinal sample employed at all three surveys.

PT as % FT pay (1st birth sample), MCS cross-sections

90 %

80 %

70 %

*100 %

◊ ♦

♦

◊

♦

◊

◊

♦

Adjusted (matched) gapUnadjusted gap

PT as % FT median pay

9 months (2001/02) Age 3 (2004) Age 5 (2006)

Wage trajectories (1st birth sample) MCS longitudinal sample

Full-time weighted to match part-timers

Any part-time

£11

£10

£9

£8

Hourly wage (2000 prices)

9 months (2001/02) Age 3 (2004) Age 5 (2006)

Wage trajectories (1st birth sample) same employer, n=550

Any part-time

£10

£8

£6

Full-time weighted to match part-timers

Hourly wage (2000 prices)

£14

Age 3 (2004) Age 5 (2006)9 months (2001/02)

Conclusions

Is there a pay penalty to working part-time amongst the mothers of the Millennium Cohort?

Yes – emerges during first years after becoming a mother.

Did the policies of 2000 & 2003 reduce the pay penalty associated with working part-time?

Not as far as we can see for mothers who changed employers

Does remaining with the same employer reduce the penalty associated with reducing hours of work?

Yes - cutting hours of work with the same employer appears to protect against PT penalty.

References

Joshi, H., & Paci, P. (1998), Unequal Pay for Women and Men: Evidence from the British Birth Cohort Studies, MIT Press, Cambridge, MA

Ermisch, J., Wright, R. (1992), ‘Differential returns to human capital in full-time and part-time employment’, in Folbre,N., Bergmann,B., Agarwal,B., & Flor, M. (Eds), Women′s Work in the World Economy, Macmillan, London

Manning, A. & Petrongolo, B. (2008) ‘The Part-Time Penalty for Women in Britain’ in The Economic Journal, Vol.118 No.526

Connolly, S. & Gregory, M. (2008) ‘Part-time Employment can be a Life-time Setback for Earnings: A Study of British Women 1975-2001’ Discussion Paper, University of East Anglia