Gender Pay Gap Contents

5Sharing care

136.Women are much more likely than men to taken on unpaid caring responsibilities, whether for children or other family members. EHRC research has found that three quarters of mothers said they have the primary responsibility for childcare in the home. This contrasts with the fact that the majority of those questioned reject the statement that childcare is the primary responsibility of the mother. Less than a third of people agree with this.

Figure 10: Who has primary responsibility for childcare in your home

Source: Gavin Ellison et al, Work and Care: A Study of Modern Parents (EHRC Research Report no. 15, 2009)108

137.Childcare has an impact on women’s job opportunities, women are more likely than men to consider these responsibilities before taking on a new job.

Figure 11: Proportions of men and women who would consider childcare responsibilities before taking a new job

Source: YouGov survey findings for CIPD report HR: Getting smart about agile working, 2014109

138.As outlined in Chapter 2, other types of caring also impact on women’s access to work. This is particularly true for women over 40 who are most affected by “sandwich caring”—looking after children at the same time as caring for elderly relatives.

139.Many of the submissions to our inquiry highlighted sharing care equally between men and women as central to reducing the gender pay gap. As the Institute of Directors put it:

One of the reasons for the gender pay gap for women over the age of 40 is childcare responsibilities and the legacy effect of taking time out of the workforce to raise children. It stands to reason therefore that if more men take time out of the workforce to raise children, and women therefore spend less time out of the workplace, the gender pay gap may begin to even up.110

140.In Chapter 4 we outlined evidence that men and women of younger generations want to share care more equally. Survey data from the Modern Families Index shows this is not just an aspiration, but actually happening in practice. Over 70% of fathers aged 26-35 drop their children at school over half the time, compared to under 50% of men in the next age category. As the report points out:

Fathers are doing more. More than one in five fathers now say they share care, with younger parents the most likely to report working flexibly and sharing family responsibilities. But gendered work expectations still persist: mothers remain the first port of call when childcare breaks down by a factor of two to one.111

Figure 12: How often parents drop their child at school by age and gender

Source: Working Families and Bright Horizons, Modern Families Index 2016112

How parental leave can reduce the gender pay gap

141.Monika Queisser, Head of Social Policy and leader of the OECD’s gender initiative, outlined OECD evidence on the role parental leave can play in reducing the pay gap. Their research “found that the gender pay gap is smaller in countries that provide better public childcare and in countries that have better parental leave arrangements.”113

142.Ms Queisser emphasised the importance of men and women taking up this paid leave equally. This allows women to work more and also equalises the “risk” to an employer of hiring a man or a woman, which has further positive consequences for women’s employment. The same argument would apply to more equal sharing of other types of care, for example for elderly or disabled family members.

143.Employers are increasingly seeing the value of supporting more equal take-up of caring responsibilities. In April 2015 EY used the introduction of shared parental leave (SPL) as an opportunity to equalise the amount they pay employees for paternity, maternity and shared parental leave. Maggie Stilwell, Managing Partner for Talent at EY explained the rationale for doing so:

Our working hypothesis… as an employer, is that that first year is very important … We know that, for working mothers, that is a period that can disrupt your career journey. …We know also that it can affect the women’s own view of themselves, their ambition and potentially also, in a worst-case scenario, how the employer views her. The great thing about shared parental leave is that it can disrupt some of those dynamics.114

144.Evidence on the financial gain to women of sharing care was presented by Adrienne Burgess, Joint Chief Executive and Head of Research at the Fatherhood Institute. She pointed to evidence from Sweden which found that for every month of leave a father took, the woman’s earnings increased by 7% a year. Ms Burgess was clear that men taking more time off would impact the gender pay gap. 115

Of course it will. The other thing is that fathers become visible as employees. Employers put up with working mothers. They facilitate them for all kinds of reasons, but they think of them as pretty unreliable employees. You can imagine in a couple, if the man has his hands dirty and everybody knows that he does this stuff in his home environment, and when the school calls he is as likely to take as the mother, then the mother is only having to be unreliable half as many times, because he is being a bit more unreliable and neither of them is being very unreliable.116

The cost of time out of the labour market

145.The high cost to women of taking time out of the labour market recurred across the oral evidence we heard. The panel addressing the barriers for professional women over 40 all agreed that taking more than between nine to twelve months away from work would negatively impact on a woman’s career. Amanda Fone told us what she advised women:

Our message to women at the moment, who come to us in their mid-30s and are starting a family … is, “Do not stop work because you will not get back in.” That is the truth.117

146.This anecdotal evidence is backed up by OECD research118 showing that increasing paid parental leave widens the gender pay gap amongst full-time employees. This is likely to be because it is overwhelmingly women that take up parental leave and who therefore suffer the negative pay consequences of taking time out of the labour market. It should be noted that the same research also found that extending paid leave had a positive, but small, influence on female employment rates and the hours worked by women, as long as the total period of paid leave is no longer than approximately two years.

147.Professor Rubery summarised the long-term costs of taking time out of the labour market:

A majority of women might still ‘choose’ to reduce commitment to wage work for a period of time. The problem that this poses is the extraordinary costs imposed on women for taking these steps. These costs include the immediate ones of losing out on career opportunities, even being forced to accept occupational downgrading and low pay. Even more significant are the very high long term costs that continue well beyond the period of active childcare and indeed into retirement.119

148.It is clear that developing structures which support men and women to share childcare and time out of the labour market more equally can go some way towards reducing the gender pay gap. So how well is the Government’s current system achieving that goal?

The current situation

149.In April 2015 the Government introduced Shared Parental Leave (SPL). Under this system, maternity pay continues to be paid for 6 weeks at 90% of weekly earnings and subsequently for another 33 weeks at £139.58 or 90% of weekly earnings (whichever is lower). Paternity leave remains at two weeks paid at £139.58 or 90% of weekly earnings (whichever is lower). SPL then allows the couple to share whatever leave and pay remain after the mother’s maternity leave has finished. SPL is paid at £139.58 or 90% of weekly earnings (whichever is lower) for a maximum of 37 weeks and eligibility is based on the mother’s right to maternity leave.

150.SPL was introduced with the explicit aim of balancing care and work between men and women. The Government’s response to the consultation on SPL said:

We want to encourage more fathers and partners to play a greater caring role; [and] enable both parents to retain a strong link with the labour market.120

The impact assessment of the SPL policy stated key benefits including: “Greater labour market attachment of women; more choice for women wishing to return to work; reduced gender pay gap in employment.”121

151.This commitment to encouraging shared care was clearly stated by the Secretary of State for Skills:

I absolutely want more men taking time out of the workplace. I hope that we will end up seeing more couples, of whatever genders, decide to share parental leave than those who decide not to. I would also say that it is a pretty significant intervention. It only came in last spring, so let us give it a little bit of time to start rippling through society because it does require a change in attitude.122

152.We do not doubt the Government’s desire to see more parents share care. However, the evidence presented on the take-up of shared parental leave suggests this may not be the most appropriate policy to achieve that aim.

Low take up of SPL

153.The Government’s own analysis of SPL has predicted that only around 2-8% of fathers will access the entitlement.123 Research into the first six months of the shared parental leave policy by law firm Hogan Lovells found that cultural perceptions, including concerns that taking leave would be frowned upon or career limiting, were the most commonly cited reason for not taking the time off. However, the research also found that employers not paying men above the statutory benefit was an important factor in low take up rates.124

154.In its research,125 the EHRC also found little evidence that SPL would encourage men to become more involved in child care and so reduce the impact of maternity leave or part-time work on women’s careers. Again, it points to levels of paternity pay as a significant barrier to uptake, noting that paternity pay is currently lower than the UK average weekly wage and below the minimum wage. In its view:

This is likely to be too low to encourage parents to share their child care roles more evenly, because of the drop in pay most men will incur. In addition, small and medium-sized businesses (SMEs), which make up the majority of employers in the UK are unlikely to supplement the basic additional paternity pay.126

155.We questioned the Government on its predictions around the poor take-up of SPL amongst fathers and asked whether it should be doing more. The Minister of State for Skills responded:

We certainly do not want to rule out that we will end up doing more, but we have only just brought it in. We have made a very clear commitment to review it in 2018. It is quite a significant intervention and you do need to allow employers time to work out how they are going to work with it and then, also, individuals to work out how they are going to take advantage of it. I certainly would not rule out that after that review in 2018 we might well want to look at going further.127

Supporting parents to share care

156.The evidence is clear that, despite its commendable aims, current policy on shared parental leave is unlikely to have a significant impact on increasing the sharing of care between men and women. In this section we examine alternative policies that could better achieve this aim.

Non-transferrable paternal leave 128

157.The Women’s Budget Group, Discrimination Law Association and Fawcett Society all suggest non-transferrable paternal leave as a policy that could shift cultural attitudes around caring. The Fawcett Society noted international evidence “makes clear that fathers play a greater role in care where there are dedicated periods of leave and higher earnings replacement rates. Only then are we likely to see a real culture change; with fathers as likely to take time out to care as mothers and employers supporting both genders to do so.”129

158.Evidence from the OECD strongly supports this view. Monika Queisser described non-transferrable leave for fathers as one of the most effective policy levers for reducing the gender pay gap:

You don’t have to be Scandinavian for this, because even very conservative countries such as Germany have instituted parental leave for fathers with non-transferrable months. Before the reform, about 3% of fathers took leave days. With that extended leave, now about a third of fathers take leave. That has happened in a very short time. It is a hugely successful way of getting a better balance of paid and unpaid work.130

159.When questioned on the strength of evidence on non-transferrable leave, the Secretary of State responded:

I have not seen the evidence. If that is the evidence that has come to the Committee, I would be very happy to look at it, and read the report and the Committee’s conclusions. Shared parental leave is going to be another important answer to that. Again, it goes back to the issue of choice or compulsion. It is much better to respect individual families and individual parents’ choices on this in terms of the way they want to structure the leave they take in order to juggle childcare responsibilities.131

160.We heard mixed evidence on whether non-transferrable leave would be welcomed more widely. Sarah Jackson from Working Families said their research had found “resistance to transferable leave. About 20% of women consistently say that they would not want to give up any of their maternity leave and transfer it to the father.”132 However, Adrienne Burgess suggested that attitudes were changing amongst younger couples. “The other figure shows that 26% of young men and young women, 25 to 36-year-olds, think parental leave should be shared equally.”133 This trend is confirmed by Working Families own research, as Sarah Jackson explained:

When you look at younger couples, they have a very strong sense that there should be equality, both in how they care and equality at work … Those younger fathers are the unhappiest with their work/life balance and they are the most resentful of their employer, which is why shared parental leave is an opportunity for employers to engage with a group of staff who want something different, which is not currently being offered to them in most cases.134

161.The cost of offering men better support to take parental leave has been estimated as between £200-£400 million a year, depending on levels of take-up.135 As we have outlined in Chapter 3, the benefits of keeping women in work greatly exceed this figure. The model used to estimate this was as follows:

162.Supporting men and women to share childcare more equally can help to reduce the gender pay gap, and help organisations retain and recruit staff. Policies that can have a real impact on increasing men’s take-up of such leave are therefore likely to have a positive effect on productivity. Such policies are likely to find favour with parents, employers and taxpayers. By ensuring that non-transferrable paternal leave is offered in addition to current maternity leave, the problem of women not wishing to give up their maternity entitlement can be avoided.

Equalising maternity, paternity and SPL payments

163.A small number of employers, including EY, have moved to equalising their payment for maternity, paternity and SPL payments. EY suggested Government equalisation of the SPL system would reduce the administrative burden on employers as well as changing the culture around shared parenting.

164.Adrienne Burgess agreed change was needed at a statutory level, noting that whilst change within individual organisations is welcome, it is change at Government level that drives progress. She used the example of doctors, who were entitled to paternity leave as NHS employees, to make her case:

With regard to hospital doctors, for example, before the introduction of statutory leave, 53% of hospital doctors in the NHS took paternity leave exactly around the birth of their child. After the introduction, building up over the last few years, it is now 93%. The introduction of a [statutory] policy makes a huge difference.136

165.There is clear evidence that levels of payment for different types of leave impact levels of take-up. As Monica Queisser observed, “Households act in very, very rational ways. They are very economical, because you calculate whom it pays more to reduce hours.”137 Equalising pay levels would end the current bias towards women taking leave because they are paid more for it.

Behavioural change

166.Whilst financial incentives, and deterrents, can influence couple’s decisions about who takes parental leave, the evidence also points to cultural factors hindering the take-up of SPL amongst men. The question of how families make decisions about caring came up on several occasions during the inquiry.

167.Chris Giles thought it was important to tackle the short-term perspective many couples operate under when thinking about whether both parents should maintain a foothold in the workplace:

It is very clear that the move to part-time or an interrupted career is very severe for life-time pay and also for retirement pay, so it is a very big decision. When people talk about choice, we know that humans don’t make great choices when they are faced with very long-term decisions. …Women and men—the household—will often take the short-term expedient thing, which will be to go part-time or take a career break, not realising the extreme damage it does to the family and household income.138

168.Evidence from the Behavioural Insights Team warned that people have a tendency to go with whatever default option is presented to them, explaining that:

There are many different ‘default’ settings when it comes to parental leave, childcare and flexible working. For example, there is the default period of leave that women are legally required to take after having a child. Women and men are less likely to opt out of this default period of leave, and it will also anchor their decision as to the total period of leave they will take.139

169.Improving levels of pay can go some way towards encouraging more men to take up parental leave. Financial measures will not address the social and cultural context in which men and women make decisions about childcare and work. There is considerable scope for further research in this area to inform Government policy.

Other options

170.Both Adrienne Burgess and Sarah Jackson pointed to the importance of fathers having an individual right to paternal leave or SPL. Under the current system, SPL is only available to couples eligible for maternity leave as it is effectively a transfer of the woman’s maternity leave to her partner. According to Adrienne Burgess:

It should be an individual right. That is so crucial. It is simple and everyone grasps it. If you qualify for paternity leave, then you qualify to take parental leave—pretty simple.140

171.Sarah Jackson also recommended looking at SPL to see if it could be offered on a part-time basis:

A very specific thing you could do to make shared parental leave more accessible to low-paid fathers is to reintroduce the original idea of having part-time shared parental leave, which would enable fathers to work for their employer, so draw down their wage for a number of days a week, and also receive their statutory shared parental pay for a number of days a week. When BIS first proposed that, we liked it a lot and the employers we talked to also liked it a lot. It was very disappointing that it was lost.141

172.When questioned on this point, the Minister of State for Skills referred to the policy of Shared Parental Leave in Touch (SPLIT) days. These allow an employee on SPL to come into work for up to 20 days without ending their period of parental leave. However, Sarah Jackson said SPLIT days are complicated, have poor take-up, and employers do not have to pay people for them. As such they seem an unlikely remedy to the difficulty of men not taking up leave because it is poorly paid.

Other types of caring

173.As we explained in Chapter 2, caring for elderly or disabled relatives has a significant impact on women’s ability to participate in the labour market and thus on the gender pay gap.

174.Carers UK highlighted the difficulty women face in juggling the demands of working and caring. Their research finds women are four times more likely than men to have given up work because of multiple caring responsibilities. They point out that:

A lack of carer friendly workplace polices, such as paid care leave and flexible working, and sufficient, high quality social care services mean that an increasing numbers of employees, more often than not women, are forced to give up work at the peak of their careers. This has a huge impact on women’s career progression, and long term financial security, as well as the wider economy.142

175.The specific impact of caring responsibilities on BME women’s access to the labour market was raised by Coventry Women’s Voices. They quote a support worker who said:

In BME households with extended families people are brought up with the values to look after each of their sick family members. If the parents are elderly they expect siblings to look after their disabled siblings. Many of these find it difficult to strike the balance between caring and continuing with their jobs.143

176.Christopher Brooks from Age UK told us it was important to recognise how hard it could be for carers to discuss their circumstance with employers:

We see a lot about it being very difficult to raise caring with your employer. It is often reported to us as being completely different to childcare, where a bit of flexibility and a bit of understanding around childcare is a lot more normal in workplaces. Caring for older people can become very, very tricky to raise with managers who simply do not want to know.144

177.The issues faced by other types of carers, for example parents with disabled children or single parents were also raised in oral and written evidence. Scarlet Harris suggested the most productive way forward would be to consider all types of caring together:

It is really important that we do not just see these as separate issues; we have childcare over here, we have elder care over here, but actually all of us are probably going to need care at some time in our lives, and are probably going to care for someone in our lives … The employers need to see it in that way as well: that people are going to move in and out of having caring responsibilities and, at some times in their working careers, women in particular are likely to bear multiple caring responsibilities and still have school-aged children and possibly an elderly or sick parent or a disabled partner.145

178.The 2011 Census figures for the UK show an 11% rise in the number of carers since the last Census in 2001—increasing by over 620,000 to 6.5 million in just 10 years. This figure is predicted to rise to 9 million by 2037. Already 3 in 5 people will become carers at some point in their lives.146

179.We have seen clear evidence that the disproportionate share of unpaid caring taken on by women can adversely impact their earnings. However, women are not alone in facing these responsibilities. Many people will face periods in their lives when they juggle unpaid care with paid work. If the UK’s economy is to prosper more effective ways to balance the two must be found.

Supporting carers

180.We heard a number of recommendations on how to improve the situation of carers. These included:

181.Christopher Brooks emphasised the importance of helping to keep people in work:

With caring responsibilities, similar to maternity, not leaving work is really important, so it is about any measures that can help people to stay in work. …Even unpaid leave can be helpful, because it gives you some job security and a bit of flexibility.147

182.The option of employers doing more to contribute to the costs of caring was also raised by Robert Stephenson-Padrose of Penrose Care:

Many organisations have optional benefits included in your compensation. Having elder care vouchers, say, to purchase formal care when needed, in addition to childcare vouchers, is something that needs to be done.148

183.The Government told us that it recognised the importance of supporting carers to maintain their position in the workforce. The Secretary of State explained what Government has been doing in this area:

The employment rate for women aged over 65 is 7.8%; it has never been higher. We know, obviously, keeping more people in the workplace is good overall for productivity and for all of us. Those are the carer pilots that we have been doing, which report back in 2017. The Carers in Employment project has been helping local authorities to support carers to stay in paid work, alongside caring responsibilities. Nine pilots started in February last year and will report back next year.149

184.We are disappointed that the only work the Government raised in the area of supporting carers was the nine pilot projects it has funded. Given that the scale of unpaid caring and its impact on both productivity and the gender pay gap, the Government needs to consider more comprehensive action as soon as possible.

Conclusions

185.The evidence is clear that caring responsibilities are a significant barrier to women’s pay and progression prospects. As long as women continue to take disproportionate responsibility for the care of children and other family members, the gender pay gap will persist.

186.More equal sharing of childcare responsibilities can help to reduce the gender pay gap by facilitating women’s return to the labour market and changing perceptions of men and women as being equally likely to take on caring responsibilities. Amongst younger couples in particular, there is a strong desire to share parenting equally. Unfortunately, current policies are not doing enough to help men and women to achieve this goal.

187.Low levels of pay for paternity and shared parental leave (SPL) are a significant barrier to men taking them up. Better pay and the option of part-time take up for SPL would improve fathers’ access to leave, particularly those from lower income groups. There is strong evidence for the effectiveness of non-transferrable paternal leave as a lever for encouraging shared care and reducing the gender pay gap.

188.Balancing caring responsibilities with work is a growing problem for many workers, in particular women aged over 40. To achieve its policy objectives the Government must support employees with caring responsibilities to stay in work. Not only will this help to tackle the gender pay gap, it will also help organisations retain skilled workers in the face of high employment rates and low productivity.

Recommendations

189.Our key recommendation is that:

190.We also recommend that:

108 These charts use additional data not published in the original report. Copyright and all other intellectual property rights in the material are reproduced by kind permission of the EHRC.

109 The Modern Families Index is based on an online survey. Online surveys are not always fully representative of the whole population as they can exclude poorer households and over-represent those with stronger IT skills.

110 Institute of Directors (GPG0001)

111 Working Families and Bright Horizons Modern Families Index 2016

112 The Modern Families Index is based on an online survey. Online surveys are not always fully representative of the whole population as they can exclude poorer households and over-represent those with stronger IT skills.

113 Q41

114 Q138

115 Johannson, E-A.The effect of own and spousal parental leave on earnings. Working Paper 2010:4. Uppsala, Sweden: Institute of Labour Market Policy Evaluation

116 Q144

117 Q65

118 Thévenon, O. and A. Solaz Labour Market Effects of Parental Leave Policies in OECD Countries 2013 OECD Social, Employment and Migration Working Papers, No. 141

119 Professor Jill Rubery (GPG0039)

121 BIS MODERN WORKPLACES: Shared parental leave and pay administration consultation – impact assessment February 2013

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124 Fawcett Society (GPG0031) para 7.4

125 Equality and Human Rights Commission Children and Families Bill 2012 -13, House of Lords, Committee Stage Briefing 2013

126 Equality and Human rights Commission (GPG0020)

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128 We think it is important that the Government move towards gender neutral language if it restructures parental benefits in recognition of same sex parents. For simplicity we have used the current language for parental leave benefits in this report: maternity, paternity and SPL. Where we refer to paternal leave this applies to second parents of any gender.

129 Fawcett Society (GPG0031) para 7.4

130 Q53

131 Q224

132 Q154

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134 Q138 [Sarah Jackson]

135 Working Families Additional Evidence GPG0066

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138 Q13

139 Behavioural Insights Team (GPG0064)

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142 Carers UK (GPG0057)para 7

143 Coventry Women’s Voices (GPG0055)

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148 Q122

149 Q241




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Prepared 16 March 2016