Women in Britain are being priced out of work and suffering from a growing gender pay gap as the result of a lack of affordable child care, a new report has found.
With the chancellor thought to be looking at ways of boosting employment in next week’s package, a survey by the consultancy group PwC found the UK slipping down the international league table for women in work.
PwC said Britain had dropped five places to 14th in the ranking of the 38 rich-country members of the Organisation for Economic Co-operation and Development, pointing to the lack of affordable childcare as a barrier to progress.
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Data for 2021 showed the gender pay gap widening four times faster in the UK than the average for the OECD, primarily due to the financial penalty from motherhood.
Larice Stielow, a senior economist at PwC, said: “An 18-year-old woman entering the workforce today will not see pay equality in her working lifetime. At the rate the gender pay gap is closing, it will take more than 50 years to reach gender pay parity.
“The motherhood penalty is now the most significant driver of the gender pay gap and, in the UK, women are being hit even harder by the rising cost of living and increasing cost of childcare.
“With this and the gap in free childcare provision between ages one and three, more women are being priced out of work. For many it is more affordable to leave work than remain in employment and pay for childcare, especially for families at lower income levels.”
PwC said childcare costs relative to average income were some of the highest in the OECD. Net childcare costs represented almost a third of the income of a family on the average UK wage, compared with as little as 1% of income in Germany.
The Women’s Budget Group, the gender equality thinktank, is urging Hunt to boost state spending on early years and childcare by £1.75bn – the estimated shortfall between current government funding for the existing 15- and 30-hour “free” schemes and the actual cost to providers of delivering those hours.
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Sarah Ronan, the early education and childcare lead at the WBG, said: “If the chancellor is serious about growing the economy and supporting families through the cost of living crisis, he needs to prioritise investment in early education and childcare. Years of chronic underfunding have led to extortionate fees for parents, providers closing down and early years workers leaving the sector because of poor pay.”
PwC uses five indicators to compile its women in work index: the gender pay gap, the female labour force participation rate, the gap between male and female labour force participation rates, the female unemployment rate and the female full-time employment rate.
