Parents who quit their jobs because they can’t find adequate childcare face a 7% wage penalty
It’s been two years since the COVID-19 pandemic closed schools and day cares, and left working parents scrambling to figure out how to care for kids while doing their jobs. Many decided they simply couldn’t do both and left their positions, with roughly 5 million Americans reporting they still were not employed at the beginning of February because they were caring for children.
Dropping out of the workforce to care for kids has serious, long-term financial consequences. Both men and women face a 7% wage penalty for taking time away from the workforce to care for a child, according to new data released Tuesday from Payscale that encompasses responses from more than 993,000 people between January 2020 and January 2022.
Women already face an average wage gap of $0.82 compared with men (and it’s wider for women of color), according to Payscale. When controlled for job level, education, years of experience, industry, and hours worked, women still earn 1% less than their male counterparts. (Payscale notes its “crowdsourced data weights toward salaried professionals with college degrees.”)
And it’s worse for mothers if they have to take time off to care for their children. The gender pay gap for women who quit because they lacked adequate childcare options is $0.73 to every $1 earned by men who were also unemployed in order to care for their children, Payscale found.
And women are far more likely than men to leave work because of childcare issues. Payscale found about 85% of women reported the primary reason they quit a job was because they were caring for a child, compared with 15% of men.
In fact, the labor force participation rate among prime-age mothers (ages 25 to 54) with young children was just under 68% at the end of 2021 compared with a 94% rate among similarly situated fathers, according to the Federal Reserve Bank of St. Louis.
About 20% of households with young children reported that one or both parents either lost or left their jobs owing to a lack of childcare during the pandemic, according to a recent analysis released by the Century Foundation, a progressive think tank. Nearly a third of parents say they cut back their work hours or took unpaid leave. Collectively, over half of families with young children took a hit on their household income when childcare was unavailable, according to the report.
And that continues to be a challenge for families who need to weigh the cost of professional childcare against their potential wages. The national annual average price of childcare in 2020 was $10,174 per child annually, according to the latest data available from Child Care Aware of America.
Any unemployment can drag down wages for those looking to reenter the workforce. And the longer women are out of the workforce, the bigger the pay gap. Women who return to the workforce after more than two years of unemployment—no matter the reason—typically earn about $0.70 for every $1 men earn.
That’s especially problematic considering that women made up the majority of the nearly 22 million jobs lost during the first three months of the COVID-19 pandemic in 2020. As of February 2022, there were still over 1 million fewer working women than at the start of the pandemic, according to the National Women’s Law Center.
And experts worry that the current environment could exacerbate the overall gender pay gap. “With the pressure of rising wage inflation, minimum wage increases, and strong competition for talent, we can expect more pay compression and pay inequity issues to arise,” Ruth Thomas, pay equity strategist at Payscale, said in a statement.
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