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

1
Part-time working and pay amongst mothers of the
Millennium Cohort
Jenny Neuburger, Heather Joshi Shirley
Dex GeNet meeting, 26-27 March 2009
2
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?

3
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.

4
Evidence to date PT/FT average pay ratios
Unadjusted ratio
PT as FT pay
Adjusted ratio
95
90
85
80
75
Connolly Gregory, NESPD 1975-2001
Manning Petrongolo, LFS 2001-2003
Joshi Paci, NCDS 1991, mothers
Ermisch Wright, WES 1980
5
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

6
MCS mothers in paid work (N 12,702)

of mothers employed (inc. self-emp)
60
40
20
9 months (2001/02)
Age 3 (2004)
Age 5 (2006)
Age of Cohort child
7
employed MCS mothers working part-time
of employed mothers working part-time
80
60
40
20
Age of Cohort child
8
Reasons for returning to paid work at 9 months
(MCS 1)
40
Multiple answers allowed
9
PT median pay as FT pay (MCS
cross-sections)
PT as FT median pay
?
80
?
70
?
60
50
9 months (2001/02)
Age 5 (2006)
Age 3 (2004)
Age of Cohort child
10
Distribution of qualifications by employment
status, MCS 1
60
50
40
30
20
10
11
Wage patterns of MCS mothers employed at all
three surveys, n 2075
12
Hourly wage (2000 prices)
10
9
8
9 months (2001/02)
Age 5 (2006)
Age 3 (2004)
FT at sweep 1 followed by PT at least once
PT at sweep 1 followed by FT at least once
12
Wage patterns of MCS mothers, same employer since
pregnancy
12
Hourly wage (2000 prices)
10
9
8
9 months (2001/02)
Age 5 (2006)
Age 3 (2004)
FT at sweep 1 followed by PT at least once
PT at sweep 1 followed by FT at least once
13
Wage patterns, highly-qualified, same employer
since pregnancy
14
Hourly wage (2000 prices)
12
11
10
9
9 months (2001/02)
Age 5 (2006)
Age 3 (2004)
FT at sweep 1 followed by PT at least once
Full-time each sweep
PT at sweep 1 followed by FT at least once
Part-time each sweep
14
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

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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.

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

100
?
?
90
?
?
?
80
?
70
Age 3 (2004)
Age 5 (2006)
9 months (2001/02)
Adjusted (matched) gap
Unadjusted gap
?
?
17
Wage trajectories (1st birth sample) MCS
longitudinal sample
Hourly wage (2000 prices)
11
10
9
8
9 months (2001/02)
Age 3 (2004)
Age 5 (2006)
18
Wage trajectories (1st birth sample) same
employer, n550
14
Hourly wage (2000 prices)
10
8
6
9 months (2001/02)
Age 3 (2004)
Age 5 (2006)
Full-time weighted to match part-timers
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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.

20
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