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Tuesday, March 21, 2023

The motherhood pay gap has been increasing in Austria for years

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Image: VOLKER Weihbold
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The fact that there are differences in salary between men and women “is not a myth, it’s a fact,” says Carmen Treml from Agenda Austria. Discrimination is not to blame, however, because most of the difference in income can be explained by women’s care responsibilities and career choices, according to the economist at the company-financed institute.

In Austria, the gender pay gap, i.e. the gender-specific salary gap between men and women, has been decreasing for years, but the motherhood pay gap, i.e. the salary difference that can be attributed to childcare obligations, is increasing. Parental leave is taken up by the mothers in 96 percent of all partnerships, only one in three Austrian couples with children have both parents working full-time, while the EU average is over 50 percent.

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While income generally increases with the age of the employee, this does not apply to women with children: after parental leave, many only work part-time or never return to work at all.

Reasons for part-time work

The part-time quota of women increases significantly with the birth of a child, Treml refers to data from Statistics Austria. On the other hand, the proportion of men with children working part-time is even lower than that of childless men. It is also noteworthy that almost half of the childless women between the ages of 45 and 54 work part-time. “I think it has a lot to do with subjective preferences and maybe not with the offer,” Treml said in an interview with APA. The general trend towards part-time work, both for men and women, will become a problem for the social system in the long run.

Caring for children or relatives in need of care is the most frequently cited reason for part-time work by women. However, there are major regional differences: While nine out of ten children in Vienna are cared for in such a way that their parents can work full-time, in Vorarlberg, Tyrol or Styria it is not even half.

All-day care is a basic requirement for a higher labor force participation among women, stressed Treml. Because without all-day care, many women would decide to look after the children themselves for financial reasons alone, because the costs of care would often be higher than the additional wage – they are stuck in the “part-time trap”.

Good child care is not enough

However, according to Treml, good childcare is not enough. In Vienna, too, full-time employment for women has declined significantly over the past two decades. Less than half of all employed women work more than 35 hours a week. There is also a trend towards shorter weekly working hours among men.

Agenda Austria sees an important reason for this in the high tax burden on work and in tax progression. In the EU, work is only taxed more heavily in Belgium and Germany than in Austria, with the tax burden increasing sharply in the middle income bracket. It is therefore unattractive to extend working hours.

Women could make a significant contribution to defusing the shortage of skilled workers, but the basic requirement for this would be to expand childcare options, say the Agenda economic researchers. It’s not just about kindergartens, but also about all-day schools.

Childcare allowance should be expanded

High income tax rates should only apply to higher incomes than at present, and a special tax credit for full-time employees could make full-time work more attractive, is the recommendation. The relief could also be staggered: the higher the number of hours, the higher the exemption limit.

The marginal wage with a current limit of 500.91 euros per month is also unfair and should therefore be abolished, according to the recommendation. The commuter allowance should be reformed and only paid out in full if you work full-time.

Agenda Austria would also like to see a reform of parental leave, which is particularly long in Austria and is almost exclusively used by women. It should be divided between the parents and reduced to a maximum of one year per partner. Staying away from the labor market for too long leads to lower pension entitlements and thus increases the risk of poverty in old age.

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: Nachrichten

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