Introduction

This chapter is about the cost of children in terms of adults’ forgone income in Britain. In practice, this means mothers’ incomes. In the 1980s (and the three preceding decades) the lifetime employment of British women appeared to conform to a stylised trajectory. Motherhood reduced women’s participation in the labour market and often confined their hours of work to part-time jobs. Hourly earnings were lowered by taking part-time jobs and by interrupted employment experience. Over a lifetime, therefore, mothers would earn less than childless women through having fewer years of earnings, fewer hours of work when employed and lower rates of pay. Estimates were made of the forgone earnings of a hypothetical mother with various numbers of children (Joshi, 1990). These suggested that the typical mother of two children earned only about half as much as her childless counterpart after the age of childbearing. The missing half represents the earnings opportunity cost of motherhood. This has ramifications for taxation, benefits, pensions and the distribution of income within the family and upon divorce. These were explored with a simulation model, and the findings summarised by Joshi, Davies and Land (1996).

We also discovered that our central trajectory of a British mother with middle-level qualifications, whom we called ‘Mrs Typical’ did not appear to be so typical internationally and that it did not apply right across the British social spectrum. The earnings profile was similar to those for Germany (West) and the Netherlands and to that of lower skilled women in both France and Britain; but it was much more disrupted than the profile for Sweden and for women in France with a high initial labour force attachment and for graduates in Britain. The latter all achieved greater, if not complete, employment continuity, presumably facilitated by maternity leave, public or private day care and other supportive measures.

The lifetimes simulated in all this previous work take place in a time warp where the parameters of participation, hours and pay relationships observed in 1980 are frozen in perpetuity. We now take parameters based on data observed in the mid-1990s, and investigate their implications for lifetime earnings and forgone earnings due to motherhood. How is the earnings opportunity cost of children distributed between the two parents and the state? Given that children do not always have two parents, we also investigate how lone motherhood affects a woman’s lifetime earnings.