Letter: HR policies need to become more mother friendly

Martin Wolf (Opinion, May 29) makes a compelling argument for the importance of falling fertility rates. He is correct that it is crucial to help parents and especially women combine careers with children. A recent study suggests that the opportunity cost of having children may be far higher than we realise. It is not just about the cost of children and the lost salary during child-rearing.

A recent Bank of Italy report compared women who started with the same background, skills and education. They were earning the same salary. After 15 years, those who had children were earning half that of their childless companions. A recent working paper from the US National Bureau of Economic Research explains why. Its Swedish data is also very clear that there is a significant parenting penalty for women. By the age of 45, women who have one or more children, suffer a penalty in earnings. It turns out that the dominant reason is because of missed promotions. Without promotions during our career we do not get significant pay rises. Women are not promoted as often as men. That difference accounts for 70 per cent of the wage gap by the age of 45.

The bulk of the missed promotion opportunities occur early in a career. Between the ages of 25 and 30, for every female promotion there are 1.3 male promotions. The impact is even more concentrated around childbirth. Around 40 per cent of the earnings gap comes from promotions in the year the woman gives birth and the year after.

Couples claim to want more children than they have. The parenting penalty is far larger than the small incentives offered by governments around the world. The parents are making a rational economic decision not to have more children. No government can afford to fund the “promotions gap”.

The focus should instead be on enabling women to combine a career with children. The provision of good childcare is a good first step. While promoting someone who is on paternity leave is also an HR nightmare, organisations will increasingly need women. Those same fertility trends will lead to a shortage of workers. HR policies need to become much more mother friendly.

Professor John Bateson
Honorary Professor of Management
Bayes Business School, London EC1
Wendover, Buckinghamshire, UK