Maternal Movements into Part time Employment: What is the Penalty? Jenny Willson, Department of Economics, University of Sheffield. 1. Aim of Analysis Is there a pay penalty associated with switching in to part time employment which acts independently of the motherhood pay penalty? Does the motherhood pay penalty differ by employment behaviour over childbirth? Previous work has shown that there is a penalty to current part time status which acts over and above the motherhood pay penalty, (Waldfogel, 1998) 4. Background 5. Data and Method 8. Implications of Results The increased probability for a mother to switch in to part time employment is a further source of gender inequality in the labour market. Gender inequality could be limited by increasing the human capital development and career progression opportunities available to part time workers. The lower wages experienced by mothers who move to part time employment over childbirth could be avoided by increasing rights to flexible working in higher skill level occupational groups. This study uses the British Household Panel Survey (BHPS) waves 1-16 alongside the BHPS Combined Work-Life History data and the BHPS Consolidated Marital, Cohabitation and Fertility Histories. Sample of women and of mothers of children under the age of 12 aged 21 to 50 years old. The mothers in the sample were all employed at some point before and after childbirth. The sample consists of 4827 individuals, total observations and employment observations Selection corrected OLS and fixed effects log wage equations are used to predict hourly wages. The endogeneity of the switch in to part time employment is investigated using instrumental variables. 3. Why is this important? 6. Results Penalties to children are similar to those previously found; 1 child decreases the hourly wage by 8%. 2 or more children decrease the hourly wage by 14%. Switching in to part time employment reduces the hourly wage by an additional 7% Moving down the occupational scale generates an additional pay penalty of 8%. Therefore, a mother of one child who switches in to part time employment receives a pay penalty of 15%. If there is additionally a movement down the occupational scale this increases to 23%. 2. Motivation This analysis extends two strands of literature 1.The negative wage effect of switching in to part time employment Occupational downgrading effects of moving in to part time employment are likely to result in a loss of career progression and human capital development opportunities, and therefore a reduction in the wage. Connolly and Gregory (2008) find a large pay penalty to switching in to part time employment which persists over time. They do not control for motherhood status. 2. The motherhood pay penalty The pay penalty to motherhood in Britain has been shown to be one of the largest in Europe, Davies and Pierre (2005) Current part time status acts to exaggerate the motherhood pay penalty. This effect matters for a large proportion of mothers. 68 percent of mothers in the UK were in employment in 2008, nearly 60 percent of these were in part time employment. A wage penalty associated with the movement from full to part time employment will exaggerate the motherhood pay penalty to an even greater extent for many mothers. If there is a pay penalty associated with switching in to part time employment which acts additionally to the motherhood wage penalty then many mothers would be at an even greater disadvantage in the labour market than previously suggested. Gender inequality Under-utilisation of skill 7. Predicted wages given behaviour over childbirth Mothers in the UK face limited access to affordable quality childcare, In the UK, full time net childcare fees for the average dual earner couple are almost 33% of family income; however the OECD average is just 13% of family income, (OECD, 2007).. Furthermore, in the UK traditional cultural ideals and social norms typically reflected the idea that a mother should remain at home in the early maternal years. As a result part time employment is often used to combine work and motherhood. Paull (2008) shows that 25% of mothers move from full to part time employment over childbirth. This transition is of concern because recent work has highlighted the poor quality of part time jobs in the UK, (Manning and Petrongolo, 2008; Connolly and Gregory, 2008).