Toddlers torpedo incomes – but only for women

Gender and parenthood continue to affect incomes in today’s Finland. The women with the highest incomes were those who had no children, but even their yearly income was around €10,000 less than that of men with children.

“Parenthood substantially reduces women’s incomes, and the impact is surprisingly long-lasting. On the other hand, the incomes of men with children were slightly higher than those of men without children,” summarises Susanna Bairoh, Research Manager at Academic Engineers and Architects in Finland (TEK).

The research dataset was FOLK, a whole population register-based dataset produced by Statistics Finland. The research was conducted by Bairoh (TEK) together with Satu Pyöriä and Niklas Mäkinen from the Work Research Centre (WRC), Tampere University.

The result is not explained by gender differences in education, as all the individuals examined in the study held higher education degrees in engineering/technology, natural sciences or ICT (STEM fields).

The study looked at the annual incomes of graduates born between 1960 and 1980. The study did not examine only wages, but all taxable income accumulated during the year. The study focused on income accumulated between the ages of 30 and 40.

Among men, annual income increased from around €40,000 to €60,000 between the ages of 30 and 40. For women in the same age band, the increase was from approximately €35,000 to €45,000–€50,000.

“Deep-seated family norms are at the heart of the gender disparity: the man is the provider, and the woman still has primary responsibility for childcare,” Bairoh continues.

She says that even if a highly educated woman returns to work soon after having a child, assumptions about motherhood affect career-related choices and, in turn, her income. For example, management positions may be declined because they require long working hours or a lot of travel. Norms have an impact, whether or not one chooses to act according to them.

Assumptions of (potential) motherhood also undermine the career development of women without children. The incomes of women with STEM degrees are lower than those of men, even when no family leave is taken.

(The article continues after the photo.)

The norms also affect men. According to the study, the incomes of single men grew more slowly than those of men in relationships. No corresponding effect was observed for women. Bairoh says that according to some studies, men are rewarded for acting according to norms: in addition to becoming a father, being in a relationship can also be financially beneficial for a man.

Jenny Söderman, Acting Executive Director of Mothers in Business (MiB), confirms that family norms remain strong in the workplace and are also constantly reproduced. According to a recent employer survey by MiB, attitudes towards starting a family are generally positive in the workplace, but there is still much to improve at a practical level in working life. One key problem identified is that fixed-term employment contracts are not always extended when an employee takes family leave.

In addition, employers often do not view family leave as a time when an employee could develop professional skills, for example, by attending training or other events to maintain and strengthen their expertise. Family leave is still too often thought of as interrupting career development, although it does not have to be that way.

There is also room for improvement in how fathers are encouraged to take family leave, how family leave could be used more flexibly, and how the career development of employees who have children is ensured equally.