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Social Policy Research 85 -
November 1995 Has the modern generation of women achieved financial independence? New evidence comes from women born in 1958 (members of the National Child Development Study), last interviewed in 1991, aged 33. They have three main sources of livelihood - their earnings, state benefits and access to the income of any partner. The research compares the income of wives with their husbands. It also asks of all women whether their own income is enough to keep themselves (and any children) above a 'survival' line. The report from City University, by Heather Joshi, Angela Dale, Clare Ward and Hugh Davies, has found:
How far have women in this age group achieved financial independence? This research refers to women born in 1958 and aged 33 in 1991 - when last interviewed in the National Child Development Study. They entered employment in the mid-1970s, as Equal Opportunities became law. They will also be facing retirement under the new pension arrangements introduced in the late twentieth century. The proportion contributed to the family income by 33-year-old women is similar to that of women in other age groups. The increase in women's average cash contribution in recent decades has been mainly through an increase in two-earner couples. There is nevertheless quite a way to go before all earn as much as their husbands. Has the dependent wife died out? If a woman earns substantially less than half a couple's income (under 45 per cent for this study), she is likely to be drawing on resources brought in by her partner, provided these are shared. On this basis, she would be, at least partially, financially dependent on him (see Table 1).
78 per cent of 33-year-old women in a couple are contributing substantially less than their partner to joint income. This implies that the majority of these women depend, to some extent, on the pooling of partners' incomes. If married women were not to receive Child Benefit - which is paid directly to them - 20 per cent would be totally dependent on their partner for all income. Women do not only contribute cash; those who bring less money into the home tend to do more work in it (see, for example, Figure 1). For example, in two-parent families, 70 per cent of mothers who are minor contributors take responsibility for looking after a sick child, compared to about 50 per cent for mothers who contribute about equally to family income.
Who is likely to be a dependent wife? Women who are minor contributors to joint income are likely to have children, few educational qualifications, experience of part-time work and a number of spells out of the labour market. Women most likely to be equal contributors to the family income are those with no children, higher qualifications, continuous full-time employment, previous partnerships and current cohabitation. Thus both stability in employment and instability in marriage increase women's contributions relative to partners'. Major contributors are a minority (10 per cent) of the women in couples. Among these cases, almost half of the husbands did not have a full-time job. Where men are not in a paid job, relatively few wives take on the role of sole breadwinner. Full-time employment is the best, though not completely certain, route to financial independence for women. An absolute measure of financial independence Using another approach, the study asks whether women (with or without partners) receive 'enough' income in their own right, through earnings or benefits. One benchmark is the income support scale, allowing for any children, which permits day-to-day survival. Forty per cent above that represents 'enough to get by' (at least in the short term). Almost one-half of lone mothers in the study receive income support. Their heavy dependence on the state means that most lone mothers can be deemed to have enough for day-to-day 'survival'. But only just over half of women in couples (54 per cent) meet this income support threshold. For mothers in partnerships, working full-time ensures a 'survival' income for all but four per cent. For those working part-time only just over half (55 per cent) have enough to meet this requirement. The implication of these findings is that women within couples are financially unequal partners and vulnerable to real poverty if their partner does not share his income. When the threshold is taken as 140 per cent of income support, as in Figure 2, less than half the women in the study have 'enough to get by', less than one-third of married mothers, and only about the same proportion of lone mothers, if their benefit income is excluded.
Childcare Less than one-third of all employed mothers in the group buy childcare. Most make informal arrangements, often with relatives or friends, particularly if their job is part-time or their children are at school. These women are likely to be minor contributors to family income and to fall below the 'getting-by' threshold. Mothers in full-time employment with children under 5 do place a heavy reliance upon childcare. Over 50 per cent of them use formal care (such as childminder, nanny, nursery or crèche) for part or all of their children's care while at work. For all employed mothers of pre-school children, the costs of paid childcare represent about 25 per cent of the women's net weekly earnings at the median (among those who pay), but about 8 per cent of family income. For lone mothers who pay for childcare, costs average £24 per week. This is less than paid by married mothers but represents a much higher proportion of family income (25 per cent). A small group of women, those most likely to purchase formal care and to be in high status occupations, remain in full-time employment over the years of childbearing. For women with partners this option leads to equality of income within the family, greater sharing of housework, and to greater occupational pension coverage (see Figure 3).
Prospects for pensions This sample of 33-year-olds is likely to remain partially dependent on their partners in old age and, for most, to a degree which has changed little from previous generations. A minority of women who gained advanced educational qualifications and delayed childbearing maintained an unbroken career. This group is not only most likely to have earnings comparable with their partners, but to be ensuring themselves independence in old age through their own earnings-related pensions. Many more of the women are pursuing the traditional division of labour in marriage and are still minor contributors of the couple's cash. Predominantly part-time earnings may put wives' incomes and, eventually, pensions over a basic minimum threshold. The pensions earned in their own right may do little more than replace the pension earlier generations of wives received from their husbands' contributions. Earning 'sufficient' pension in their own right rather than as appendages of their husbands is, in a sense, a gain. But gains also seem limited when compared to what their husbands might get, particularly if the men have good private pensions and their wives rely on SERPS. The sort of independence most can expect in old age is limited to 'getting by' rather than symmetry with her partner. Total financial dependence has mostly given way to partial rather than complete independence. The notion of the old-fashioned dependent wife may be facing extinction, but many of the new generation of women still stand to gain from the financial security of marriage. About the study The study draws mainly on data collected from the NCDS in its fifth sweep in 1991 when its members, everyone born in a week in March 1958, were 33. It focuses on a sample of up to 4,200 women for whom relevant data were recorded, particularly those who had partners, where the samples were over 3,000. The vast majority of these were legally married. The incomes of these women and their partners were compared and analysed in terms of a number of explanatory factors in the women's circumstances at 33 and from her earlier life history. Supplementary data on other cohorts were drawn from the Family Expenditure Survey, courtesy of the ESRC Data Archive, the Employment Department and the Central Statistical Office. A simulation model of lifetime incomes and pensions, constructed by Dr Davies, was used to make an assessment of pension prospects. Further information The full report, Dependence and Independence in the Finances of Women at 33, is published by the Family Policy Studies Centre for the Joseph Rowntree Foundation (price £9.50). This title is now out of print. Three working papers from the study are also available from SSRU, City University, Northampton Square, London EC1V 0HB, Tel: 0171 477 8484. These are Income dependency within couples (NCDS Working Paper 35), Income transfers over the lifecycle (NCDS Working Paper 36), and Combining employment with child-rearing: an escape from dependency? (NCDS Working Paper 37). A related report, The Tale of Mrs Typical, is available from the Family Policy Studies Centre, 231 Baker Street, London, NW1 6XE.. |
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