Work-family policies, women’s labor market attainment and employer success: A research review

Janet C. GornickCity University of New York

Ariane HegewischInstitute for Women’s Policy Research

14 June 2010 hegewisch@iwpr.org

Research Review Work-family policies defined as:

Maternity / paternity / parental leave Workplace flexibility measures Childcare supports Not covered are taxation & family benefits; regulation of

“standard work week” (and regulation more broadly) ; services for disabled and/ or frail adult– not typically defined as WFP but important in explaining gender outcomes in employment.

Impact on women: Participation Wages

Impact on employers: Productivity effects Business effects

Research Review

Identify best practice policy advice Reduce penalties as result of caregiving Do not increase discrimination Improve labour force attainment

How transferable are research findings from high to lower income countries? 95% of research is focused on OECD countries

Work family policies

Research is predominantly based on (and from) high-income countries Informed by policy concerns in high-income countries: labor

force participation; fertility; aging (OECD/ EU) Informed by national / regional preoccupations:

US research most concerned with wage elasticities and the employment decisions of low-income women;

Scandinavian research more concerned with men and gender relations;

Western Central European research more concerned with part-time employment.

Employer studies primarily from less regulated / Anglo / US countries – mostly on business case/ flexible working

Work-family policies

Designs vary widely, and reflect mixed and often contradictory motives, including: Stabilizing family income and preventing poverty Lessening inequalities linked to age, gender, family structure, and

household income Furthering gender equality Supporting “work-life balance” Granting parents time to care for their children Improve children’s educational outcomes through quality out-of-home

childcare Alleviating labor shortages Preventing under-utilization of women’s accumulated human capital Increasing fertility Raising firm-level or national-level productivity

Maternity / paternity/ parental leave

Supranational measures address provision of family leave benefits and rights.

International Labour Organization (ILO): 2000 ILO Convention No 183 adopted “to further promote equality of all

women in the workforce and the health and safety of the mother and child, and in order to recognize the diversity in economic and social development of Members, as well as the diversity of enterprises, and the development of the protection of maternity in national law and practice”. Specifies women should be entitled to paid maternity leave not less than 14 weeks.

United Nations (UN): Family-related leaves addressed in 1967 Declaration on the Elimination of

Discrimination against Women and 1981 Convention on the Elimination of All Forms of Discrimination Against Women.

European Union (EU) 1992 EU Pregnant Workers Directive requires that “workers who have recently

given birth or who are breastfeeding [should] be granted the right to paid maternity leave of at least 14 continuous weeks, allocated before and/or after confinement”.

1996 EU Parental Leave Directive granted men and women workers “an individual right to parental leave on the grounds of the birth or adoption of a child to enable them to take care of that child, for at least three months, until a given age up to 8 years.” (Unpaid)

Maternity / paternity/ parental leaveLessons from the policy literature:

Durations matters Too short is problematic Too long is problematicThe turnaround point appears to be somewhere between 5 and 12 months

Policy designs shape gender outcomes Individual entitlements for each parent High wage replacements Possibility to take part-time or intermittent leave Social insurance financing

Policy designs shape class outcomes Cover low earning workers/ low quality jobs Avoid designs which push low income women out ot paid work

The absence of leave is inefficient: “… if countries with no unpaid maternity leave (such as the United States) introduce this measure at the average OECD level (15 weeks), they could increase MFP [multi-factor productivity] by 1.1 percent in the long run.” Bassanini and Venn, 2008:11, OECD Monitor

Statutory right to paid maternity leave almost universal

Typically funded by employer mandate in Asia, elsewhere social insurance Statutory right to paternity leave in a few countries No parental/ shared leave entitlement (to our knowledge)

Impact limited by size of informal sector and lack of enforcement Fewer than 50% of mothers in Malaysia made use of employer funded paid

maternity leave – low awareness (Bernasek & Gallaway 1997) Taiwan: enhanced employer funded maternity benefits led to both increased hours

and employment rates; impact almost doubled after enforcement began. Insignificant impact on wages (Rodgers 1999)

Knowledge limited by lack of research (though see: Rodgers 1999; Fontana & Paciello 2007; Abramo & Toledo 2002) No panel studies on individual wage development (to our knowledge) No systematic studies on employer effects – left to anecdotal studies [costs of

maternity leave compared to costs of benefits for married men]

Lower income countries: Maternity / paternity/

parental leave

Strong evidence that lack of flexibility, particularly of quality part-time

work, pushes women (mothers & caregivers) into secondary labor market or out of work. loss of human capital; social insurance protection in ‘bad’ part-time work

Majority of OECD countries have some statutory rights for family caregiving, particularly to voluntarily reduced hours. Laws often more recent than rights to adjust hours re education, training and/or early

retirement. Emphasis on finding solutions that are manageable for both employer and employee

(win-win solutions); labor standards less strict than leave

Lower income countries Not subject of employment law (instead sex specific regulations re night work,

overtime, breast feeding etc.) Survey evidence of need/ demand in formal sector (China, South Africa, Singapore)

Flexible and alternative work arrangements

But I don’t think we will need to speak on Sunday- we are close enough for the presentation to sort out final issues on Monday morning.

Research, especially comparative, more limited than on leave

Standardized flexibility in Sweden- Right to 75% working day for parents since 1978

Part-time work now more likely among older women; for younger women- transitional stage (childcare and tax & benefit incentives encourage return to full-time work)

Individualized flexibility in Germany, the Netherlands (part-time/ full-time), UK (part-time/ flexible working), since 2000s:

Statutes work reasonably well for medium level jobs; not so well for management jobs or in male dominated occupations & firms

Flexibility beyond part-time work: attractive to men Need to be complemented by (are no substitute for) measures that address long

hours culture; lack of predictability in working schedules; discrimination against non-standard hours workers.

Research on business impact primarily Anglo-American , and focused on making business case (often in voluntary context)

Benefits in relation to retention, motivation & commitment, absenteeism Some start-up costs

OECD recommends workplace flexibility as area for statutory regulation, given evidence of employer inertia in face of likely productivity gains.

Flexible and alternative work arrangements: Impact

Childcare supports Quality early childhood education and care (ECEC):

Dual impact: Enhances children’s future success and allows mothers to work Yet typically not treated as linked policy goal; Same for schooling: OECD avg.: school covers 700 hours/”care” per year

Research on childcare and labour force participation suggests: Lack of reliable childcare pushes people from formal into informal sector. Availability of subsidized childcare increases both hours in labor market &

earnings of individual women (Canada: Lefebvre et al 2008)). Availability of publicly funded childcare may or may not lead to increased

participation (substitution from informal to formal care; educational effects) (Jaumotte 2003)

US research: childcare conceptualized in terms of wage elasticities – focuses on effect of cash subsidies (assumes availability of market).

Employer-provided childcare In high income countries part of employer benefits- not mandate Can increase fathers’ involvement (but very expensive); Tends to be very cyclical (disappears when skill shortages lessen) Has discriminatory effects when linked to female employment (Chile, Egypt)

Women react to work-family incentives: policy designs matter If goals are the support for women’s labor market attainment,

economic self-sufficiency (and child welfare) then best practice recommendations are quite clear: Job protected, medium length leave; paid by social insurance/ taxation Addressing long-hour culture and promoting win-win workplace flexibility Gender neutrality of provision as a minimum, but active designs to increase

male use of work-family provisions “Educare” - providing developmental supports for children while supporting

childcare needs of parents (and lowering costs of working) Tax/ benefit designs which encourage equal participation (marriage treatment)

Evidence on employers suggests considerable potential gains, no major costs but slow dissemination of good practice.

Transferability to lower income countries?

Conclusions: Best Practice

Financing: Is it possible (how) to design policies which make employers carry the costs of

at least some of work family supports (given the paucity of public/ social insurance funds in many countries) without increasing discrimination against women?

Childcare: Are there low cost options to broaden childcare availability for lower income

women (for example: via flexible working rights, such as shift sharing? Micro grants for childcare providers? Use of schools/ public buildings for childcare?)

Role of men/ fathers: The most gender equal policies provide a non-transferable leave entitlement to

mother and father separately. Should policy focus on this at this point in time? Might this harm women/ families instead of getting more men to use the leave?

Transferability to lower income countries?