Forgone income and motherhood: What do recent British data tell us?

Children affect women's opportunities in the labour markets of most advance d countries in three ways: an immediate effect on employment, and effects o n longer term earning power and pension coverage. This paper quantifies the se impacts on women's lifetime income for hypothetical illustrative British cases. New results, based on data collected during the 1990s, are compared with estimates from 1980. Although childrearing and employment have increa singly been combined over the period, the estimated loss of gross earnings associated with motherhood remains substantial. It still amounts to around half potential earnings post childbirth for less qualified sections of the British female labour force, but has become smaller for highly qualified wo men. The paper examines the effect of the tax/benefit system on the costs, and makes some assumptions about the distribution of net costs between moth ers and fathers. It also shows how far motherhood jeopardizes financial sec urity in old age, particularly for the least qualified.