Australian mothers' participation in employment

Analyses of social, demographic and family characteristics using the Household, Income and Labour Dynamics in Australia (HILDA) survey
Research Paper No. 52 – November 2013

2. Background and literature

An interest in maternal employment has been heightened over recent decades for a number of reasons. One is that the ageing of the population has meant attention has focused on mothers, among others, as a potential labour supply for the Australian economy. Australian mothers are a key target group since their employment rate, at 62% in 2009-10,2 indicates there is potential for more to be engaged in paid work. Another key factor that drives interest in maternal employment is concern about the wellbeing of adults and children living in jobless households, particularly lone-mother households (Baxter, Gray, Hand, & Hayes, 2013).

In this report, selected characteristics of mothers are compared according to their different levels of engagement in paid work. These characteristics have not been used to predict who is or is not employed, though literature on determinants of maternal employment has guided the choice of variables examined. Key variables examined are relationship status and age of youngest child. Other variables analysed include mothers' education, prior work experience, age, carer status, health status and ethnicity; and the family variables of housing tenure and partner's employment and income. The focus throughout this report is on how the distribution of these variables differs for those with differing levels of engagement in employment.

This section presents a brief review of the literature relating to maternal employment, drawing in particular on Australian research. The review highlights the key factors that explain variation in mothers' participation in employment. For more extensive reviews, and also for discussion and analyses of trends in maternal employment in Australia, refer to Austen and Seymour (2006), Baxter, (2005; 2012), Birch (2003), Evans and Kelley (2008), Gray, Qu, de Vaus, and Millward (2002) and Parr (2012).

Ages and numbers of children

Mothers are often not in paid work because they have very young children to care for, and indeed, for many mothers of the youngest children, they are able to remain out of employment through the provision of parental leave.3 However, the employment rate increases as children grow and women become more likely to combine their caring responsibilities with paid work. The ages and numbers of children are examined in this report, and in examining mothers' reasons for not looking for work, we will see mothers' responses indicate they place considerable value on the caring role. Previous research on maternal employment has clearly shown how participation varies both with the age of the youngest child and with the number of children. For example, using HILDA, Parr (2012) showed maternal employment rates increased with the age of the youngest child, and were lowest when there were three or more children in the family. Such findings are consistent with other analyses of HILDA (Baxter & Renda, 2011), the International Social Science Survey Australia (Evans & Kelley, 2008), the Negotiating the Life Course Survey (Baxter, 2012), the Australian population Census (Baxter, 2005; Gray et al., 2002) and the Longitudinal Study of Australian Children (Gray & Baxter, 2011).

Increased participation by mothers as children grow older is likely to reflect a number of things. One is that mothers may feel it is neither appropriate nor desirable to give up the care of a baby to someone else, but as children become more independent and social, then non-parental care may be seen to offer opportunities for children to develop, as well as offering potential for parents to work. Mothers may seek to work for a range of reasons, including financial ones, to maintain skills or a career, to socialise and to be able to contribute in some way outside the home (Baxter, 2008). Financial aspects may also matter in relation to the cost of child care and other costs of working, relative to the income that comes in and possibly the income support that is withdrawn. These costs may be particularly important in explaining lower rates of employment among mothers with larger families.4

Lone and couple mothers

While the proportion of lone mothers participating in paid work in Australia has increased over recent years, this proportion remains below that of couple mothers (Baxter & Renda, 2011; Gray, Qu, Renda, & de Vaus 2006). This is true in several other OECD countries, such as the United Kingdom (UK), the United States (US) and New Zealand (see Baxter & Renda, 2011). A key focus of this research is therefore on exploring differences between lone and couple mothers.

Many explanations have been given for the lower employment rates of lone, compared to couple, mothers, including differences in their educational attainment, wages and abilities to combine work with caring for children, and their differential access to informal child care networks (Eardley, 2001; Gray et al., 2006; Harding et al., 2005; Hynes & Clarkberg, 2005; McHugh & Millar, 1996; Walters, 2002). Further barriers to lone mothers' labour market participation may be their relatively high rates of physical and mental health problems (Butterworth, 2003). The role of government support is also important, especially as lone mothers are more likely to be in receipt of income support payments and are thus more likely to face financial disincentives to work due to the interaction of the income support system with wages (OECD, 2007; Millar & Evans, 2003). Baxter and Renda (2011) found that the lower employment rate of lone mothers was partly related to differences in their characteristics, but also, when transitions into and out of employment were examined, related to lone mothers being more likely than couple mothers to leave employment in a given month.

Other socio-demographic factors

Higher educational attainment is associated with a greater likelihood of being employed (e.g., Austen & Seymour, 2006; Baxter, 2012; Gray et al., 2002; Parr, 2012). This is likely to reflect that education is associated with higher earnings potential, and therefore women with more education have more to lose by not working; that is, the opportunity cost of not working affects the employment decision. Higher education can also reflect a greater commitment to a career and may be associated with being able to attain more interesting and fulfilling work (Brewster & Rindfuss, 2000), and less conservative attitudes about mothers and employment (Evans, 1988; van Egmond, Baxter, Buchler, & Western, 2010). On the demand side, employers may prefer more highly educated people over others (Miller, 1993; O'Donnell, 1984).

Another measure of human capital is prior work experience. Past employment experience is strongly related to the likelihood of being employed at a point in time (Gray & Chapman, 2001; Ross, 1984). For mothers, being employed in pregnancy is an important predictor of timing of return to work after childbirth (Baxter, 2009). Also, employment experience is related more generally to transitions into and out of employment: those who have spent more time in employment are more likely to remain employed if already employed, or to enter employment if not employed (Baxter & Renda, 2011; Buddelmeyer, Wooden, & Ghantous, 2006; Haynes, Western, Yu, & Spellak, 2008; Knights, Harris, & Loundes, 2000; Stromback, Dockery, & Ying, 1998).

Other personal characteristics of mothers are associated with the likelihood of them being employed. One factor is country of birth, with migrant women, particularly those from non-English speaking countries, less likely to be employed than Australian-born women (Parr, 2012; Shamsuddin, 1998; VandenHeuvel & Wooden, 1996. Refer also to Birch, 2003, for a discussion of issues concerning analyses of ethnicity and labour supply). Another factor is health status, with mothers with poorer health being less likely to be employed (Renda, 2007). Baxter and Renda (2011) showed, for example, that non-employed mothers were much less likely to enter employment in a given month if their health was self-rated as fair, poor or very poor, as opposed to good or very good. Mothers with poorer health, if employed, were also somewhat more likely to leave employment in a given month. Being a carer to someone (other than the typical care of young children) is also associated with lower levels of engagement in paid work (Edwards, Higgins, Gray, Zmijewski, & Kingston, 2008).

In couple families, mothers' employment status is likely to be associated with that of her partner. In particular, wives (or partners) of unemployed men typically have relatively low rates of labour force attachment (Bradbury, 1995; Evans & Kelley, 2008; Jordan, 1993; King, Bradbury, & McHugh, 1995; Micklewright & Giannelli, 1991). Reasons for this include those of assortative (or associative) mating5 and the effect of location of residence (for example, where the family lives in a low employment area, the probability of employment would be lower for the husband and the wife). Also, gender norms may suggest that it is not acceptable to have a household with a "female breadwinner" model (Saunders, 1995).6 In families with employed fathers, the father's wage is generally negatively associated with the employment of the mother (Evans & Kelley, 2008; Gray et al., 2003), but these effects are not always large and, in fact, elsewhere it has been observed that the relationship is not straightforward (see Lehrer & Nerlove, 1986, for a review of the effect of husband income). When the husband's income is sufficient to meet financial obligations, the wife has more choice in whether to remain at home or to work, but when the husband's income is very low, there is likely to be a greater need to supplement his income with income from another source. However, as discussed, the effects of assortative mating may also mean a high-earning husband is likely to have a high earning-wife, and so these relationships may not be observed.

Another family-level factor is that of housing, with mothers' employment patterns likely to vary according to tenure and also the value of mortgage repayments (see Birch, 2003,Dawkins, Gregg, & Scutella, 2002; Scutella, 2000). The location of residence can be an important determinant of labour force participation, since the labour markets in different areas may not be uniform in the availability of options for employment (for mothers or for others).

Self-perceptions, social supports and values

Other variables explored in this report relate to mothers' self-perceptions (of personal autonomy), social supports and values. These more subjective variables are more often considered in qualitative studies and in discussions about the roles of preferences in explaining patterns of maternal employment (e.g., Hand, 2007; Losoncz & Bortolotto, 2009). They have been included here in an attempt to discover whether there are qualitative differences in mothers who have differing levels of engagement in paid work.

Labour force characteristics

The final set of data examined in this report relates to specific items about labour force participation; for example, information about looking for work, wanting to work, and reasons for not looking for work. This information is particularly informative, as it provides insights into the possible barriers to entering employment for mothers who say they want to work. Prior research comparing the labour force status of lone and couple mothers has shown that among not-employed mothers, there are some differences in labour force characteristics. In particular, lone mothers are more likely to be unemployed than are couple mothers, with couple mothers being more likely than lone mothers to be out of the labour force (Gray et al., 2006).

Footnotes

2 See footnote no. 1.

3 Mothers on leave from employment are classified as being not employed unless they have worked in the last four weeks or have been on paid leave in the last four weeks.

4 Associations between family size and maternal employment are more complex than this, as larger family size may reflect mothers valuing the parental role more than the worker role, and therefore choosing to have a larger family.

5 "Assortative mating" is the term given to explain that people are likely to form relationships with those with whom they have characteristics in common.

6 Another line of argument is that women can take up employment in times when their husband is out of work. This is known as the "added worker" hypothesis. This hypothesis may explain why in some families there are cases of wives working while their husband does not work; but given the low rates of employment among wives with not-working husbands, it is not a common phenomenon.