Study: Employment and earnings among lone mothers

1980 to 2000

Two major demographic developments have been behind big gains in employment and earnings during the past two decades among lone mothers aged 40 and over, according to a new study.

The study found that rising earnings among these individuals since 1980 were the result of aging among the baby boom generation and the postwar revolution in the educational attainment of women.

Among younger lone mothers, economic outcomes have been relatively stagnant.

Using census data, this study is the first to explore why employment and earnings have improved recently among lone mothers.

Like married mothers, lone mothers were much better educated and significantly older in 2000 than in 1980. Gains in their aggregate employment and earnings reflected this.

In 1980, the population of lone mothers consisted predominantly of cohorts of women born before 1950. However, during the 1980s and 1990s, they were replaced by the very large baby boom cohorts born in the 1950s and early 1960s, composed of women with much higher levels of education and labour force attachment.

In 1981, three-quarters (76%) of all lone mothers had been born before 1950; by 2001, this proportion had plunged to only 7%. During the same time frame, the proportion of lone mothers with postsecondary or university education increased from 28% to 49%. Generally speaking, the more highly educated are more likely to work and earn higher wages than their less-educated counterparts.

Furthermore, during the 1990s, baby boom mothers began entering their 40s, an age when both employment and earnings tend to be higher. The proportion of all lone mothers who were aged 40 to 49 rose from 25% to 38%, while the proportion under 30 declined from 25% to 18%. Older more experienced workers also tend to earn more than their less-experienced counterparts.

Largely as a result of these changes, employment rates among all lone mothers went up by 12 percentage points. At the same time, annual earnings among those employed rose by 16%, producing a substantial decline in the low-income rate of lone mothers.

These gains were concentrated among older lone mothers. Employment rates among older lone mothers (aged 40 and over) rose by 18 percentage points, while annual earnings increased by 26%.

Among lone mothers under 40, however, the employment rate rose by only 8 percentage points, while earnings among those with jobs fell. The decline in the relative earnings of young lone mothers reflected a general erosion of earnings experienced by all young workers over the past several decades.

The revolution in female education levels that divides the postwar generations from their predecessors may be reaching maturity. By 2001, almost 70% of women aged 25 to 29 had completed university or held a postsecondary certificate: there may be little room for further gains. Hence, rising educational attainment may not be a source of economic gains for lone mothers in the future as it was in the past.

Just as important, the aging of the baby boom mothers was a one-time event that will not be repeated. This factor may also have a one-time effect on the economic outcomes for lone mothers.

The research paper "Why did employment and earnings rise among lone mothers during the 1980s and 1990s?" is now available as part of the Analytical Studies Branch Research Paper Series (11F0019MIE2006282, free) from the Our products and services page of our website.

Related studies from the Business and Labour Market Analysis Division can be found at Update on analytical studies (11-015-XIE, free) on our website.

For more information, or to enquire about the concepts, methods or data quality of this release, contact John Myles (613-951-1656) or Garnett Picot (613-951-8214), Business and Labour Market Analysis Division.