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The price of parenthood

Updated Thursday, 24th November 2005

Having children brings many changes. We consider the price of parenthood

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Pregnant woman Copyrighted  image Icon Copyright: BBC

Pregnancy and unfair dismissal
Pregnant women who have been treated unfairly by their employers have several options available to them.

Employers who refuse to employ, or who decide to dismiss a woman because she is pregnant will be regarded as having directly discriminated against her. The usual requirement, under the Sex Discrimination Act 1975, that a woman must show that she has been subjected to less favourable treatment compared to the treatment of a man in a similar situation is dispensed with. The European Court of Justice has indicated that in this situation a comparison is not required. Thus, denying employers the opportunity to avoid liability by arguing that they would treat a man suffering from a medical condition in the same way. However, a comparison is required where an employer discriminates against a woman suffering from a maternity related illness after the end of the statutory maternity leave period.

A statutory claim for unfair dismissal is also a possibility where a woman has been dismissed for pregnancy or a maternity-related reason. Such women are in an advantageous position compared to most other employees as the usual qualifying time period of one year's continuous employment does not apply. Also, dismissal in this situation is regarded as being automatically unfair. So, unlike most other claims for unfair dismissal, an employer is not given the opportunity to justify the reasonableness of his/her response. However, an employer is free to establish that the dismissal was due to a legitimate reason, which is not connected with pregnancy, such as the woman’s misconduct or a redundancy situation.

The effectiveness of the use of the unfair dismissal provisions as a means of protecting the position of pregnant woman is reduced by the limitation that such claims are open to ‘employees’ only. This prevents many pregnant women employed on casual short-term basis from bringing a claim. The fact that a potential claimant has just three months in which to initiate a claim will deter many women from embarking on a potentially stressful course of action whilst pregnant or caring for an infant.

The cost of children
A first baby increases the income that a childless couple needs to maintain its standard of living by 9 percent before the baby is 2, by 18 percent when it is between 2 and 4 and by increasing amounts as it gets older. And this doesn’t take account of the even more substantial costs of providing for their care. No wonder some people decide to save when they first get married to provide for increased future expenditure! By the time a couple have three teenagers, they need an income about twice as much as they did when they were just a couple. If their income does not increase, having three teenagers halves their standard of living!

The financial impact of having a child may be different on households on different income levels. On the one hand, children tend to share the standard of living of their parents, so better off households may be expected to spend more on their household than less well-off households. On the other hand, evidence shows that some poorer households spend more on clothes and toys for their children than better-off households, perhaps because they are determined that their children should not have to do without.

When people have babies their tastes almost certainly change. In particular, they are likely to have feelings about wanting their child’s needs met that they couldn't have had before that child was around. So it may be wrong to say that the parents are worse off if they cannot spend as much on themselves as before. This doesn't take account of the ways in which people’s feelings about what matters to them may change as their household changes.

Children not only need feeding and clothing, they also need looking after, and providing for their care is the most expensive aspect of having a child.

Boy on bike and his dad Copyrighted  image Icon Copyright: BBC

Government help for parents
Parents in all societies are expected to be the major financial providers for their children. Children, as we have seen, add considerably to the costs of their household, but their parents’ wages aren’t higher because they have children. Large families have particularly high costs and lone parents may face particular difficulties through having at most one earner in their household. Because of these inequalities between households and because the welfare of children is seen as a matter of public concern and an investment in the future of society, governments in most developed economies make a financial contribution to parents’ costs in raising children.

Governments also contribute to the welfare of children by providing public services direct to children, such as health and education and childcare in many countries, or by providing help with paying for such services. In the UK there are payments to parents designed to help simply with the living costs of having children in a household. Currently these are of two types:

  • Child Benefit, which goes to all parents and simply depends on the number of their qualifying children;
  • Child Tax Credit, whose level depends on the parent’s income and is not paid at all to the 10% of highest income parents.

Lone parent households consistently receive more of their income from child related government support than two parent households. This is not because they are given any special support by the government. Rather child related government support makes up more of the income of lone parent households because they tend to have such low incomes. They have low incomes because:

  • there is at most only one adult earner;
  • a smaller proportion of lone parents than of couple parents have jobs;
  • most lone parents are women who earn on average less than men;
  • they tend to be employed for shorter hours than those who have a partner to help look after the children.

The division of paid and unpaid work
How well the members of a household live depends not only on the total income and how it is distributed between them, but also on the time people spend at home looking after each other and the housework. Looking after the household and caring for other members of the household is a form of unpaid work. Some of it may be work that people do happily, and some may not be done so cheerfully, but it is work in the sense that it contributes to the well-being of people, which would otherwise have to be paid for, and removes the opportunity to do paid work.

Those who live on their own may have relatively little unpaid domestic work to do, but they have to do it for themselves (unless they employ someone to do it) - just as they have to provide for their expenditure out of their own income. In a multi-person household, the unpaid work may be more substantial, especially if the household includes people who need looking after. And just as some members of the household may contribute more income, some may contribute more unpaid work than others, but all members benefit from these contributions.

The stereotypical traditional household, which is in fact not at all typical these days, used to be a male breadwinner/female caregiver household in which the man earned all the income and the women stayed at home to look after her husband, the household, the children, and anyone else who needed care. Indeed it used to be a matter of pride for a man that his wife didn’t need to get a job, showing that he could support her financially. People waited to get married until the man earned enough for his wife to be able to give up employment and devote herself to looking after him and the household.

This is not what happens in most households today, and most young married women without children have jobs. However among Pakistani and Bangladeshi communities less than 50 percent of women under 35 with partners but no children are in employment. For other ethnic groups the employment rates of young partnered women who are not yet mothers is high, ranging from close to 80 percent for Black African and Indian women to over 90 percent for White and Afro-Caribbean women.

When children arrive the amount of unpaid work that needs doing rises considerably, even when some of their care is outsourced by the use of paid childcare or through relatives helping out. There are competing norms about the best way to look after children, with some parents feeling that full-time parental care, usually by the mother, gives a child the best start in life, while others believe equally strongly that the involvement of trained professionals and the regular contact with other children that a nursery provides is important.

Either way the amount of unpaid work at home increases and so, for most families, the arrival of children makes the couple’s work-life balance and the household division of paid and unpaid labour into an acute issue. Unless the couple has made an active decision to divide everything equally, social norms and economic circumstances mean it is usually the woman who makes the most adjustments, increasing her hours of unpaid work and in many cases decreasing her hours of paid work while her partner, if she has one, keeps on with his hours of paid work unchanged or may even increase them somewhat to compensate for the loss of her earnings.

Becoming pregnant is the start of a road to financial complexity!

About this article

This article is based on extracts taken from the forthcoming Open University Business School courses You and Your Money (DB123) and Employment Law and Practice (W221).





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