The wage-penalty effect: The hidden cost of maternity leave

by David Baker

Australian women suffer a ‘wage penalty’ when they return to work after having a child, according to new research by the Australia Institute.

In the first year back at work, women can expect to earn around four per cent less per hour on average than they would if they had not had a child, the research shows; this equates to $1,566 a year in foregone wages per person. Mothers are losing about $126 million per year in foregone wages across the workforce as a result.

A new report published by the Australia Institute, The wage penalty effect: The hidden cost of maternity leave, confirms the findings of overseas research demonstrating that incomes grow less quickly among women returning to the workforce.

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