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Steep childcare costs mean women pay a high price for motherhood

20-Dec-12
Article By: Sue Learner, News Editor

Steep childcare costs and high taxes deter many women from working, according to a new report.

The report ‘Closing the Gender Gap: Act Now’ by the Organisation for Economic Co-operation and Development (OECD), found gains in female education attainment have contributed to a worldwide increase in women’s participation in the labour force, but high childcare costs and taxes leave many women working part-time or not at all creating a gender wage gap.

In OECD countries men earn on average 16 per cent more than women in similar full-time jobs.

At 21 per cent, the gender gap is even higher at the top of the pay scale, suggesting the continued presence of a glass ceiling. Even though there has been progress in narrowing the gender gap in pay, especially in employment, this is not enough and much remains to be done in many countries, said the report.

“Closing the gender gap must be a central part of any strategy to create more sustainable economies and inclusive societies,” said OECD secretary-general Angel Gurría.

“The world’s population is ageing and this challenge can only be mastered if all the talent available is mobilised. Governments should make further progress in the access and quality of education for all, improve tax and benefits systems, and make childcare more affordable, in order to help women contribute more to economic growth and a fairer society.”

The average pay gap between men and women widens to 22 per cent in families with one or more children.

Whereas, for couples without children, the gap is seven per cent. Overall the wage penalty for having children is on average 14 per cent, with Korea showing the greatest gap, while Italy and Spain have almost none.

The OECD claims improving the tax and benefit system for working parents would help tackle the gap.

After accounting for childcare, more than half (52 per cent) of a family’s second wage is effectively taxed away. This proportion rises to 65 per cent and above in Australia, Germany, Ireland, Switzerland, the United States and the United Kingdom.

If childcare eats up one wage, there is often little or no financial gain from both parents working or at least working full-time. Part-time work among women is most common in Austria, Germany, Ireland, the Netherlands and the UK.

Taking into account part-time work, the gender wage gap in take-home pay doubles in many European countries, and triples in Ireland and the Netherlands.

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