Employment Trajectories and Later Employment Outcomes for Mothers in the British Household Panel Survey: An Analysis by Skill Level

Abstract:     
Maternal employment formed a central plank in the former Labour Government's strategy to reduce child poverty. Even where potential jobs were low-skilled and low-paid, policy was explicitly work (rather than training) first, and lone parents in particular were given direct and indirect financial subsidies to enter employment of any kind. The explicit assumption was that a low-paid job would be a stepping-stone to better things. From 2008 a little more stick was introduced to what had been a largely carrot-based approach to encouraging employment, a shift that has continued under the Conservative-Liberal Democrat Coalition Government in power from May 2010. However, there is little evidence in practice that a low-paid job when one's child is young is a reliable route to improved future prospects. This paper uses the British Household Panel Survey to explore this issue further. It examines the employment trajectories of 929 women for the ten years after the birth of their youngest child, asking two main questions. Do mothers tend to remain in employment once they have taken a job? And do wages and other employment outcomes further down the line (when their youngest child is ten) reflect the employment pathway taken? In both cases the paper focuses in particular on differences between women with higher and lower levels of qualifications. The paper finds mothers following a variety of employment pathways, with instability much more common than steady work trajectories. One in three mothers moves in and out of work over the decade after the birth of their youngest child, and this is true for both lower-skilled and higher-skilled mothers. Stable work histories do appear to carry benefits in terms of wages when the youngest reaches ten, but the benefits are substantially higher for women with higher levels of qualifications, as might be predicted by human capital theory. More highly qualified women who moved in and out of work over the decade had an hourly wage at ten which was 33% lower than similar women with a stable work history; for women with few or no qualifications the corresponding figure was 14%. Levels of occupational progression as measured by change in NS-SEC status over the decade were encouraging, but for both higher and lower skilled women job satisfaction when the youngest is ten appears unrelated to the pathway taken.

Number of Pages in PDF File: 32

JEL Classification: J22, J24, J31

working papers series