Employer provided care is the key to closing gender gaps, Queen Mary economist says

Employers who provide care for the children of their employees can help to significantly reduce the ‘child penalty’ that many women face during their career, new research from Anna Raute, Senior Lecturer in Economics at Queen Mary University of London has shown. 

Released at an event hosted in line with International Women’s Day (8 March), Anna Raute’s research highlights that, while government policies such as paid parental leave and subsidised childcare exist, they have not gone far enough in addressing the long-term setbacks women face in the labour market.

The Women Economists: Shaping Policies, Shaping Lives event brought together leading economists to explore how research can drive policies that promote gender equality, highlighting the role of parenting in the female career trajectory. 

2024’s International Women’s Day theme “Accelerate Action” called for urgent steps to break down systemic barriers to gender equality. One of the most persistent challenges is the career cost of motherhood, known as the “child penalty.”

Raute’s research highlights that, while government policies such as paid parental leave and subsidised childcare exist, they have not gone far enough in addressing the long-term setbacks women face in the labour market.

However, employers can play a crucial role in accelerating change. Her research, based on linked employer-employee data from Germany, found that:

• Mothers in firms with childcare support are 10 per cent more likely to return to work after childbirth.
• These firms attract and retain more female talent, particularly in high-skilled roles.
• The “child penalty” is reduced by over 10 per cent, helping mothers maintain stronger career trajectories.

Speaking at the event, Raute emphasised the need for immediate action:

“If we want to accelerate progress towards gender equality, workplaces must step up,” she said.

“Employer-provided childcare is a proven way to support working mothers, keep women in the workforce, and reduce long-term inequalities. But it’s not enough broad government action is needed to ensure childcare is accessible to all.”

A shared responsibility for gender equality

Achieving gender equality cannot be left to individuals or workplaces alone, it requires system-wide change, she continued.

While employer-led initiatives help reduce the child penalty for women in high-skilled jobs, only broader access to affordable childcare can ensure that all women regardless of background have equal opportunities to build their careers.

“Firms that provide childcare see a rise in female employment, but we need more than isolated efforts,” Raute said. 

“To truly accelerate action on gender equality, we must expand childcare access across all sectors, ensuring that no mother has to choose between her career and her family.”

The Women Economists: Shaping Policies, Shaping Lives event reinforced the importance of data-driven solutions to gender inequality, demonstrating how research can drive policies that empower women and create lasting change.

Read Anna Raute’s full blog on the LSE site here: https://blogs.lse.ac.uk/businessreview/2025/03/06/gender-gaps-are-reduced-in-family-friendly-workplaces/