The Maternity Gap : Extracts from “Unlocking The USD 172 trillion Gender Dividend” IWD 2024 Report

March 28, 2024 Share this article:

Across the world, it is almost always women and mothers who shoulder the responsibility for childcare. Even taking a break to have and raise a family has a significant impact on women’s earning capacity, which in turn impacts their ability to save for a comfortable retirement.

But there’s another reason organisations should be applying their minds to luring women back to work after maternity leave. As Klajda points out: “Studies show that increasing the proportion of women in the top organisational structures of companies has a positive impact on the efficiency of companies and the productivity of decision-making processes. The management approaches most often used by women strengthen employees’ sense of responsibility and allow them to create a friendly work environment. That is why it is worth encouraging women to return to work after maternity and parental leave. But you first need to understand why they are considering giving up their careers or taking a longer break.”

According to a survey of countries by and insights from our global experts:

  • The average time off for maternity leave (regardless of pay equivalent) across all countries is roughly 18 weeks
  • The average full-rate equivalent time off is roughly 14 weeks.
  • The average pay rate is 79.8%.
  • Only four countries pay below 50% during maternity leave: the United States (0%), the United Kingdom (29.8%), Australia (42.4%), and Canada (47.7%).
  • Denmark: the cost of childcare is heavily subsidised by the government and both parents are entitled to paid leave, promoting gender equality in caregiving responsibilities.
  • Austria: legal entitlement to a childcare place or kindergarten obligation only exists from the year the child turns five before September 1st – i.e., one year before starting school.
  • Germany: insufficient and expensive childcare means that nearly half of all women (46%) work part-time, compared to only 11% of men.
  • Argentina: parental leave is legally three months of fully paid leave for women and they can take an additional three months unpaid. Paternal leave remains the exception.
  • US: is the only country among the Organization for Economic Cooperation and Development’s 38 member states without mandated paid leave for new parents.
  • India: paid maternity leave was recently increased from 3 to 6 months. Anecdotal evidence suggests a subsequent reluctance to hire women on a fulltime basis, in certain segments of the economy.

The impact of the cost of parental leave and childcare on pay scales can be seen in detailed figures from Austria. Dr Zdrahal-Urbanek says many aspects of gender inequality, as well as actual steps towards optimisation, are well documented in the country. With a gender pay gap of 18.8%, Austria is significantly above the EU average of 12.7% in 2021. European frontrunners include Luxembourg, Slovenia, Romania, Italy, and Belgium, with 5% or less. The difference in pay between women and men is influenced by several factors:

  • labour market segregation
  • different career biographies
  • employment interruptions, especially due to motherhood.

Maternity Gap Breakdown Per Country

Zdrahal-Urbanek notes that almost half of all working women are employed part-time, compared to only 11% of men. This affects not only salaries and pension contributions but also the opportunity to advance to management levels because a full-time commitment is usually expected at executive level.

But, if accepted as part of a woman’s career path and used strategically, part-time work may be a way to bridge the gap when a woman leaves the workforce to have a child. “Our Scandinavian clients have demonstrated that high leadership positions can be successfully managed by part-time employees or shared between two people. Some of our clients outside Scandinavia are starting pilot tests and are having very positive experiences with it. However, there is still a lot of scepticism in many cases.

“Nevertheless, we see a lot of proactivity and support from our clients in reintegrating women with children back into the workplace early. This works whenever there is support from the executive board, regardless of gender. They show flexibility regarding working hours, and duty schedules, and support working mothers by providing perks such as childcare, especially during school vacations.”

The role of policymakers in facilitating – or preventing – meaningful participation by women in the economy cannot be underestimated. The Czech Republic is a case in point, says Martinová: “The previous socialist system wanted all women to work and developed a good network of preschools to enable them to do so. Post 1995 though, these schools became the responsibility of local municipalities, who now had to bear the cost of running them. This move coincided with a social and political shift in attitudes toward working women, and in many cases, mothers were incentivised to stay at home. More stay-at-home moms meant fewer children attending preschool, and between 1990 and 2000, the reduced demand combined with rising costs led to many preschools being closed down. The upshot is that mothers who choose to (or need to) work have very few public childcare options. Private preschools are so expensive that they generally don’t justify mothers returning to work. As a consequence, women – at a crucial junction in their careers – are obliged to step out of the workplace. On average, this costs women around five years of their earning potential. “In our consulting company, parental responsibility is the most common reason for leaving. Since 2010, only two mothers have reintegrated into the team, working on a part-time basis,” she adds.

Sonal Agrawal points out that while the childcare burden that women face at home is difficult for businesses to solve, it is not impossible. “One of our clients – a global conglomerate in commodity / heavy industries, with 180,000 people – has run a “seven-stage” programme which has meant that in seven years, they have moved their metric from 11% to 21% women. Apart from a well-thoughtout programme, they have had support from the leadership and complete consistency in execution, a willingness to think out of the box and a commitment to putting their money behind the genuine pain points. One of the innovative initiatives they run is free travel for a nanny and infant up to two years of age, for new mothers who have to travel for their jobs.”

Read the full International Women’s Day Report here

With contributions and leading insights from Sonal Agrawal; Joo-Lee Aw; Anne Borgen; Andrea Brand; Julie Garland-McLellan; Regina Graf; Karen Greenbaum; Claudia Hardy; Corinne Klajda; Jana Martinová; Mpho Nkeli; Sandra Olive; Toral Patel; Lauren E. Smith; Maria Isabel Ventura; and Julia Zdrahal-Urbanek