ifo Institute / EconPol Europe: Parenthood Increases Inequality between Women and Men in Germany
Inequality in the labor market between men and women in Germany is at its greatest when there are children involved, finds an international research group that has examined the development of inequality in 17 countries in Europe and North America over the past 50 years. Among 30-year-olds, mothers earn on average 70 to 80% less than fathers. For childless people of the same age, the difference is much smaller and has fallen to less than 5%.
For men in Germany, there is an opposite trend. “In the labor market, fathers aren’t negatively affected by parenthood. On the contrary, they’re slightly more likely to be employed and they earn a bit more than childless men,” says ifo researcher Max Lay. The researchers believe that one reason for this is the disincentives in the German tax and transfer system. “Marital splitting in particular supports a family model in which, after the birth of a child, women tend to return to the labor market only part-time if at all,” says ifo researcher Elena Herold. Compared to other European and North American countries, the income gap between mothers and fathers is biggest in Germany.
The difference in earnings goes hand in hand with a higher probability of mothers working part-time. Mothers in their 30s in particular are four times more likely to work part-time than women without children. The strong influence of parenthood on women’s income lingers for a long time, despite the declining inequality in the employment rate in recent years. While the employment rate for men between 25 and 60 has hovered around 90% over the past 40 years, in that time it has risen from under 60% to over 80% for women.
