Later start of parenthood increases income equality

There is a slight decrease in income inequality between families with small children, according to a new study from Stockholm University. Later start of parenthood seems to be a main driving force behind the equalisation.

Four parents sit on a bench in a park and talk with a pram in front of them.
Photo: Roland Magnusson (Mostphotos)

The advancement of age at first birth during recent years has been substantial and widespread enough to change the income profiles of those entering parenthood. This is one of the main trends affecting the decrease of inequality between households. 

“That postponement of parenthood has equalised incomes between families speaks to how having kids at a later age gives more time for career advancement, which could secure better income trajectories for mothers and fathers alike,” says Sunnee Billingsley, professor of Sociology at the Stockholm University Demography Unit, Department of Sociology, and first author of the study.

 

Opposite forces at work

“When couples have their first kid, and how they share care and work, matters to income inequality between households. We find quite complex effects of both these changes over time,” says Sunnee Billingsley.

Inequality between families with small children is slightly decreasing, but there are changes that cancel each other out, which makes the overall development seem mild. 

On the one hand, women still experience a dip in income after having their first child, but their income recuperation was getting better. This was pushing toward an increase in inequality. On the other hand, men’s income developments before entering parenthood and the postponement of parenthood were working in the opposite direction – toward equality between households.

 

Men’s income the strongest factor

The small increase in household equality can largely be explained by the rapid income growth among men before they have children. Specifically, gains for men at the bottom of the income distribution and for the youngest men entering parenthood appear to be the strongest factor. That men’s income matters most to family inequality in general is consistent with past research.

Since the study zoomed in on a period in Sweden when men’s parental leave became more widespread, one might expect that this development would have a positive effect on women’s income. However, this seems not to be the case. 

“We do not see significant changes in the immediate effects of entering parenthood on women’s income dynamics. Instead, couples simply seem to have lower income in this time period, relative to their previous incomes. But it is likely that the shift toward greater gender equality in childrearing has contributed to women having better income recuperation once they return to work than in previous years,” says Sunnee Billingsley.

 

How the study was done

The researchers used Swedish register data on family connections and income. They studied the period that begins with economic recovery following the economic crisis in the 1990s until 2018. The population included all couples that could be matched on having a first joint child together and that were living together, in total 920,385 couples. They were observed from two years before having their first child up to eight years after. Inequality trends from 1995 to 2018 were simulated using counterfactual calculations that held constant the timing of parenthood and different components of household income from the first observed year. 

Couples living together with children are increasingly challenged as the main household type in Sweden, which means that this study addresses only one part of the population and does not reflect income inequality from a full population perspective. Future studies should also address parental couples not living together.  

 

More about the study

“How family dynamics shape income inequality between families with young children: The case of Sweden, 1995-2018” is published in Population and Development Review. 

Authors: Sunnee Billingsley, Pilar Gonalons-Pons, Ann-Zofie Duvander

 

Contact

Sunnee Billingsley, Professor, Department of Sociology, Stockholm University.

E-mail: sunnee.billingsley@sociology.su.se