Babies and bosses

Are work and family life compatible? Balancing jobs and family life is a challenge throughout the OECD area, and more effort is needed to make this easier for parents that want to work. Governments can help.

All too often parents find it impossible to balance commitments to family and employers. Little wonder it is becoming more common to start a family later, have fewer children or have no children at all. Some parents may choose to stop working even permanently, despite the fact that they would like to have jobs, because of time constraints, no access to affordable childcare or difficulties in resuming their careers after childbirth.

Reconciling work and family life is important to individuals and societies. Parents who wish to care for their children by giving up work should have their choice respected. Often, however, parents see no way of giving their children the care and attention they need other than by staying at home. Yet children whose parents are not in paid work are more likely to be poor, while mothers who have interrupted their careers to care for their children are at higher risk of poverty when they are older.

But pursuing a career often leads to postponement of childbirth and declining fertility rates. In Switzerland, for example, where combining a career and motherhood is difficult, 40% of university-educated women are still childless at age 40. The ability to generate income in a fulfilling job and the desire to provide the best for one’s children, giving them the care and nurturing they need, do not have to be mutually exclusive. Policies can help parents find the right balance.

Reducing barriers

More women participate in the workforce today than ever before. But differences between men and women in employment opportunities and wages are still considerable. Women who work are more likely to have part-time or lower-level jobs and they often get paid less than men, too.

Poverty has a marked negative effect on child development. Maternal employment is crucial to fighting poverty and ensuring child well-being: children in two-parent families where only one parent has paid work are almost three times more likely to be poor than those in families where both parents are employed. Single parents face particularly severe difficulties in reconciling work and care commitments, being both breadwinner and main carer. As the risk of children growing up in poverty is three times as high in jobless single-parent families, it is important that policy is developed that gives single parents a realistic chance of combining work and care commitments.

Population dynamics point to another reason why female employment is important. The declining number of children, and the ageing of OECD populations more generally, have serious implications for the future shape of societies, and threaten the financial sustainability of social protection systems. As labour supply decreases, living standards and public finances are at risk, and increasing female labour force participation can help resolve this challenge.

Many (potential) parents wish to work and have (more) children: information from surveys suggests that the number of children desired by young people is on average 0.5 children per woman above observed fertility levels. So what is stopping people from having children? Probably not work itself; the number of parents in paid work is growing, and nowadays the countries with higher rates of female employment also tend to have the highest fertility rates. Countries with policies that facilitate regular female employment, such as by offering public support for childcare, flexible working hours and tax/benefit systems that ensure that work pays, are also those countries with the highest fertility rates.

Choice

It is up to the parents themselves to decide whether one or both parents in a couple should be in paid work and who should take care of the children. In reality, governments influence the decisions that parents make. Take tax and benefit systems. These can discourage mothers from engaging in paid work, or working more hours. For example, a system that taxes the income of the family unit will tax the second earner, often the mother, at the same rate as the father, even though her earnings are usually lower. By taxing earners individually, second earners would face a lower rate and have more financial incentives to work.

Some tax/benefit systems involve long periods of paid leave for parents–up to 3 years or more in Austria, Finland, France and Germany. Income support during leave periods, even when payment rates are well below previous earnings, makes it easier for parents who wish to look after their children themselves. However, excessively long periods without paid work can damage employment and career prospects.

Weak financial incentives to work in the tax/benefit systems of Australia, Ireland, New Zealand and the UK contribute to only around 50% of single parents working. Improving the financial returns to work, by introducing in-work benefits as childcare support for working parents, has helped to reduce joblessness among sole parents in the UK. Nevertheless, sole- parent employment rates are 15 to 20 percentage points below those in most OECD countries, and this is related to the fact that benefit receipt for sole parents with children below secondary-school age is not conditional on seeking a job.

To reduce long-term benefit dependency and poverty among such families, governments should provide childcare support and introduce make-work-pay policies together with employment support through counselling, training, work-experience placements, etc., for these clients who have been away from the world of paid work for a long time and who frequently need to regain selfconfidence and upgrade skills. To take advantage of such a support system, mothers and fathers on income support should be required to use the opportunities open to them, for their own benefit, as well as that of their children.

Public childcare counts

Greater access to formal childcare facilities, subsidised by public authorities, can help those parents who wish to engage in paid work to do so. Childcare costs can be very high. In the US, where parents’ fees constitute 76% of childcare financing, low-income families can devote a quarter or more of their family income to childcare. By contrast, for families in Sweden, fees cover 11% of childcare costs on average, with low-income families often paying very low fees, or none at all.

In many countries, good childcare provisions already exist, but these are not always affordable and may not suit working hours. Some countries have little choice but to consider significant increases in financial support to assist with childcare costs. Many others need to better integrate childcare provisions and pre-school education. Babies and toddlers are not the only concern, of course, and for older children, adequate care out of school hours and during holidays is also essential if parents are to hold down fulltime jobs. In other words, childcare support should satisfy parental preferences for type and hours of care, with effective quality standards imposed and monitored across all types of formal childcare.

Family-friendly workplaces

In a growing number of countries, such as the Netherlands, policy allows employees to change working hours or, as in Sweden, entitles parents with children of pre-school age to reduce them. Workers in the UK can ask their employers for more flexible working hours. Generally, it is mothers who take advantage of such measures because on average they earn less than their partners, so that household income suffers least if women reduce working hours. Attitudes and culture are also important since many employers (and colleagues) may look dimly on fathers who take parental leave after childbirth.

Firms play a crucial role in helping to reconcile work and family life. They can provide more part-time opportunities, for example, which many parents and firms find useful. Other family-friendly workplace practices also include continued wage payments during maternity leave, flexible working hours, term-time leave, and leave to care for sick children. Such practices are common in the public sector and among large firms with a significant female workforce, and are more commonly associated with highly educated and high-skilled workers, whom firms wish to retain because of the costs of job-matching. They are less likely to apply to women in less skilled occupations.

Even if family-friendly working practices can reduce absenteeism and increase employee commitment, or raise performance, not all employers are convinced that the costs of introducing such measures outweigh the benefits. Beyond part-time work, the business case for providing other family-friendly arrangements is generally unclear, and flexible working practices are not all that widespread. In most countries, governments are content to continue encouraging enterprises to embrace family-friendly workplace practices. Future labour supply concerns may convince more employers of the merits of family-friendly workplaces, but widespread changes are unlikely without government legislation.

The role of fathers is key, too. If both fathers and mothers were to take time off to look after young children, there would be far less conflict between work and child development considerations. In an increasing number of OECD countries, fathers can take paternity leave (ranging from a few days to a few weeks) and/or are eligible to share parental leave with mothers, as policy is trying to get more fathers engaged in providing personal care for their children. However, in practice, fathers rarely take off six months to care for a child on a full-time basis. Men’s hours of work actually tend to increase after becoming fathers. Even among dualearner couples, women spend more time on both housework and childcare than their partners, and many feel pushed into a home-making role, whether they wish it or not. Gender inequality in care-giving within families remains widespread.

References

OECD (2005), Babies and Bosses: Reconciling Work and Family Life, series covering Australia, Austria, Canada, Denmark, Finland, Ireland, Japan, New Zealand, the Netherlands, Portugal, Switzerland, Sweden and the UK.

For further information on the OECD’s work on family-friendly policies, please contact Willem Adema at: willem.adema@oecd.org.

©OECD Observer No 248, March 2005




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