The Financial Costs of Caring in the British Labour Market: Is There a Wage Penalty for Workers in Caring Occupations?

Recent evidence from the USA suggests that people engaged in occupations involving providing care for others, such as childcare and teaching, suffer a wage penalty. After taking into account job and individual characteristics such as level of education and work experience, people in these occupations in the American study earned about 6 per cent less than their peers in other types of occupation. However, we do not yet know if people working in similar occupations in other countries also suffer the same degree of disadvantage. The issue is important because, despite the perception that people in caring jobs place a relatively low weight on the level of remuneration when making career decisions, a number of studies have shown clear evidence of an association between pay and the propensity to give up working in a caring occupation. There are implications too for social inequality as many caring jobs are done by women and associated wage penalties could contribute to the persistent gender gap in pay. This study compares and contrasts the predictions of neoclassical economics, cultural feminist theory and social closure theory. Data are taken from 17 waves of the British Household Panel Survey and include a total of 23,773 individuals, giving 110,677 person-year observations. These data are analysed using multi-level linear regression. The results show clear evidence of a statistically significant wage penalty associated with working in some caring occupations. Those occupations requiring lower levels of educational qualification, such as nursing assistants and auxiliaries, are particularly hard-hit by the wage penalty. On the other hand, some occupations, such as medicine and teaching, have fared better than comparable non-caring occupations over the same period. We discuss the implications of these results for the gender gap in pay, poverty, social inequality and the future supply of caring workers