Family policy

The centrality of family policy to influencing labour market outcomes was only explicitly recognized by states as well as academic analysts relatively recently, and, arguably, belatedly. Until the 1990s, the debate over the state’s role in promoting particular types of family structure and organization was framed in terms of ‘women’s rights’, especially to engage in paid work and determine how many children they will raise, which is sometimes set against either issues of ‘children’s rights’ and welfare or fears about the ‘breakdown’ of the nuclear family. Increasingly, however, governments of developed countries, especially in Western Europe during the 1990s and, more recently, East Asia, have become concerned about declining birth rates and aging populations and are thus framing family policy in economic terms. Currently, women in many of these countries need to choose between having children (or, perhaps more accurately, having larger families or having children earlier in life) and engaging in paid work. The problem for governments is how state intervention might permit families, but especially individual women, to do both, meeting the twin policy objectives of increasing the birth rate and increasing economic productivity, without neglecting child welfare. Counter-intuitively, the ‘work-family trade-off’ is even more acute in countries that have strong family-oriented cultural beliefs and practices and yet provide a lower level of direct state support to families, including nations with ‘conservative’ welfare regimes such as Greece, Ireland, and Portugal. Traditionally, it was presumed that increased female participation in the paid workforce was linked to the declining birth rates experienced by advanced industrial nations, but recent data, especially from Europe, suggests that variations in the birth rate have much more to do with the extent to which states devote resources to easing the tension between paid work and raising families (Ahn and Mira, 2002; Bongaarts, 2002; Bettio and Villa, 1998; Brewster and Rindfuss, 2000; Esping-Andersen, 1996, 1999, 2002; Kalwij, 2010; Thevenon and Gautier, 2011).

Family policy may be ‘direct’ or ‘indirect’, meaning that deliberate attempts can be made to influence family size and parental workforce participation but also that many government policies have non-deliberate and unintended consequences in this field (Kamerman and Kahn, 1978). In addition, of the three policy areas considered here, responsibility for this one is the most diffused. Both policy analysts and family policy activists tend to argue that better policy would result from having a single administrative body coordinating state action in the field, but this is rare. Many different factors operate to influence the work- child trade-off, including access to contraception and abortion, local cultural beliefs and practices, indirect effects of the tax system, as well as deliberate government policies aimed at reducing the costs of this trade-off. While family policy is a much larger field than policies for work-life balance, this analysis will be limited to an assessment of the extent to which the state has deliberately responded to the challenge of creating a work-family balance in Greece, Ireland, and Portugal in order to influence future labour market structure.

The analysis that follows takes into account six key policy mechanisms by which states may encourage individuals and families to balance child-rearing against workforce participation. The first is taxation, where different regimes encourage or discourage the take-up of part-time work in particular. The tax code also interacts with other policy mechanisms, sometimes in unforeseen ways. The conventional wisdom is that if taxes are individualized and no tax benefits are granted for privately paid child-care, for example, this will both ‘force’ potential parents into full-time paid work and reduce their incentives to have children, because the family income will drop dramatically if one wage- earner, more often the female partner, decides to stay at home (Dingeldey, 2001). Alternatives to tax individualization include systems that compulsorily base levels on a couple’s income. Tending to discourage workforce participation on the part of the second income-earner, such a regime can be found in Ireland. More likely to encourage part-time workforce participation, many family policy activists prefer the ‘one and a half’ family income model of income splitting for tax purposes, found in France among other European countries. In countries such as Greece, tax benefits or write-offs often increase according to the number of children in a family. This appears as a crude and often not very effective way of encouraging families to have more children.

A second policy mechanism that has received a considerable amount of attention at the European level and throughout the OECD in general is childcare, and research shows that the availability and affordability of childcare can be the most decisive factor influencing women’s economic decision-making (Erhel and Guergoat-Lariviere, 2013). This can be provided directly by the state or indirectly by non-profit organizations, by the informal or family sector, or by the private sector outside or inside family homes, although the state usually has some oversight even in the case of the latter. Increased state involvement in the provision of childcare, or at least the funding of it, has become common in Europe, and with that involvement has come increasing concerns about the quality and quantity of care available. Specific measures include the number of places made available in the public child-care system (where it exists) and the extent to which the state indirectly or directly subsidizes the private and voluntary sectors.

Third, advanced industrial states have supported families since the early twentieth century through direct cash payments to either the mother or the ‘head of the household’, generally referred to as a child or family benefit (Ginsborg, 2000). Child benefits may be means-tested or universal, can vary according to the number of children in a household, and can provide a good lens on a state’s overall approach to family policy. Given Ireland’s pro-natalist albeit often ‘hands-off’ policy tradition, a ‘children’s allowance’ has been paid on a nonmeans tested basis for third and subsequent children since 1944 (Curry, 1998: 24). Increasingly, many countries, including Portugal and Ireland in this case study comparison, have moved away from child benefit as a universal entitlement and have instead used it as means-tested poverty relief measure. Again, family policy frameworks with a bias toward supporting ‘large families’ might pay higher rates for third and subsequent children. This is the case in Greece.

A fourth key policy area is maternity leave and benefits. Though these are theoretically separate schemes, they must be considered together because the availability of benefits often influences the take-up of leave from paid work. If maternity leave is guaranteed by law, and yet this leave is unpaid and there are no maternity benefits or very limited state pay-outs to compensate for lost wages, women may choose not to take up their statutory rights. Similarly, but worth considering separately as a fifth mechanism for reconciling family and working life, is paternity leave legislation. The rate of paternity leave take-up is also strongly linked to whether or not the law guarantees that fathers are paid during their period of leave, usually by their employers. Portugal has been particularly proactive, not only compared with the other Southern European countries and Ireland, but also with the rest of the OECD on this score. As the Portuguese experience also shows, implementing parental leave legislation often requires a fundamental cultural shift surrounding traditional gender roles related to the care of children.

Finally, flexi-time, the availability of part-time work, and reduced working days are a sixth way by which states can reduce the costs of the work-family trade-off. Unlike the other five indicators, the difficulty for policy formulation here is that the use of flexi-time and other time-related measures is generally the subject of employment contracts, rather than enacted into law, but even so the state may actively encourage such strategies without codifying them in law. Moves in this direction are often reflected in social pacts or other types of signed agreements, where they exist. Ireland, for example, has built such voluntary ‘family-friendly’ initiatives into social partnership agreements. Encouragement of part-time work, in particular, is much more difficult in both Greece and Portugal since both countries abide by the ‘Southern European model’ of welfare provision. This model combines universal healthcare with other benefits such as retirement income that are strongly linked to an individual’s occupation rather than distributed universally. There is also a greater emphasis on the provision of welfare by the family rather than the state. Benefits are generally tied to engagement in full-time work over an extended period of time, with Greece considered the near ideal-type, Portugal deviating furthest from it and Italy and Spain lying somewhere in between (Ferrera, 1996; see also Flaquer, 2000 and Martin, 1997).

The case study analyses presented in Chapters 4 to 6 assess the extent to which state and non-state political elites in Ireland, Portugal, and Greece increasingly view family policies as part of the second tier of a labour market support structure for twenty-first century economic and social development. As these chapters will show, there is considerable variation in the extent to which each of the three national cases has begun to reconceptualise family policy in this manner, and, correspondingly, the extent to which each of the six specific policy mechanisms discussed above has been employed with the aim of reducing the tension between work and family life in mind. Before discussing the case study material in detail and presenting an explanation for why there has been policy divergence across the countries considered, it is worth reviewing some objective data related to this issue area. Table 2.4 contains a number of family policy

Ireland

Portugal

Greece

OECD

average

1 Fertility rate

  • 1990
  • 2006
  • 2.12
  • 1.90
  • 1.56
  • 1.36
  • 1.39
  • 1.41
  • 1.86
  • 1.65

2 Maternal employment rate compared to female employment rate (2007)

Female employment rate (ages 25^19) Maternal employment rate (child under 16)

  • 69.5
  • 57.5
  • 76.5
  • 76.4
  • 61.6
  • 58.7
  • 69.5
  • 65.3

3 Enrolment rates of children in formal childcare or early education services (2006)

Ages 0-3 Ages 3-5

  • 25.2
  • 49.4
  • 43.6
  • 78.9
  • 18.2
  • 47.3

4 Weeks of maternity leave, equivalent to 100 per cent of pay (2006-2007)

18.2

17

17

12.8

5 Weeks of paternity leave, equivalent to 100 per cent of pay (2006-2007)

0.0

2.0

0.4

6 Flexi-time provisions

Proportion of companies that allow employees to accumulate hours for longer periods of leave Possibility of varying the start and end of daily work, but no accumulation of hours

  • 10
  • 25
  • 3
  • 12
  • 1
  • 18

-

7 Total public spending on family (cash, services, and tax measures) as percentage of GDP (2003)

2.60

1.80

1.30

2.41

Source: OECD Family Database. Indicator 1, chart SF4.4; indicator 2, chart FM2.1; indicator 3, chart PF11.1; indicator 4, chart PF7.1; indicator 5 chart, PF7.1; indicator 6, FMF10.1. Indicator 7 from OECD (2007), chart 4.1.

indictors, especially related to issues of work-life balance, across the three national cases of interest here. These indictors not only partially reflect prior patterns of state intervention in this policy arena, but also illustrate the specific circumstances in which each country must construct policies for work-life balance. They do not precisely reflect the six key policy mechanisms above but, rather, reflect the impact of policies in each of these policy spheres.

Turning first to the Irish case, the country experienced a surge of women entering the paid workforce during the economic boom period of the 1990s. Employment growth during this decade was largely fuelled by return migration, then women entering the labour force for the first time, followed by, chronologically speaking, foreign migration (Fahey et al., 2000; Tansey, 1998). This meant that, by the late 2000s, Ireland had a female workforce participation rate equal to that of the OECD average, although not as high as that of Portugal or of many Northern European countries. Part of the reason for this continued lag is that the gap between female and maternal employment rates is still pronounced, reflecting the fact that many mothers of young children opt to stay at home. This in turn can be explained by a combination of prevailing cultural attitudes that mothers should not be ‘forced’ to work outside the home, as well as continuing gaps in the availability and affordability of childcare in particular. In terms of fertility rates, Ireland continues to have one of the highest birth rates in the developed world, outstripped only by Iceland, the United States, Turkey, and Mexico, out of thirty OECD countries, in 2006. As Chapter 4 fully illustrates, Ireland still lags well behind most Western European countries in terms of the array of child and parental services and benefits made available by the state. This is due to the very recent shift that the country has made from being one that actively discourages women from engaging in paid work, towards one in which female workforce participation is increasingly expected. In addition, a number of targeted family welfare benefits and programmes were not expanded in Ireland until the 1990s. The somewhat belated attention given to issues of work-life balance, however, does mean that Ireland appears more generous than the two Southern European states on at least two dimensions: the total amount spent on family services as a percentage of GDP was twice that of Greece in the early 2000s, and Irish companies appear more resistant to the extension of flexi-time arrangements than do either Portuguese or Greek businesses.

For the past two decades, Greece has stood out among European countries, along with Italy and Spain, as combining an especially low female workforce participation rate with a low birth rate. While Table 2.4 reports Greece’s 2006 fertility rate as being slightly higher that Portugal’s, it not only remains below OECD and European averages, but there are also several additional reasons to be cautious about this trend. After reaching a low of 1.26 in 2001, the turnaround only began in 2004 and 2006 was in fact the first year that Greece’s rate overtook Portugal’s. Furthermore, the increase in birth rates may be more indicative of Greece’s high rate of migration, discussed below, rather than government policy success as such. Most significantly, however, Greece has a particularly low female workforce participation rate, with only four OECD countries - Italy,

Mexico, Turkey, and Malta - trailing behind. This has remained an underlying trend for some time, in contrast to the way in which Irish women surged into the paid workforce during the 1990s. Taking into account women aged between fifteen and sixty four, a slightly different measure from that used in Table 2.1, Ireland’s female workforce participation rate grew by 22.2 percentage points between 1991 and 2000, while Greece’s increased only slightly, by 4.6 (Eurostat, 2003). As Chapter 5 fully illustrates, Greek family policy has generally been targeted only at a small group of families with ‘many children’, meaning that most families, given the prevalence of two-child, two-parent nuclear families in the country, receive little direct support for reconciling family and working life. Moreover, trends of declining fertility have been consistently framed as a ‘population’ or even ‘cultural’ crisis, rather than by the notion of work-life balance, per se.

Portugal is an interesting case when it comes to the development of policies for work-life balance, especially in a Southern European context, because high rates of female workforce participation have been maintained, especially from the early 1980s, without much direct support for families from the state. While there has historically been very little state intervention to help individuals and families ease the tension between working and family life, the majority of women engage in full-time paid work, with participation rates almost matching those of the Nordic countries. This can be explained by a mixture of idiosyncratic local factors, including the historical entry of women into the workforce as the result of labour shortages caused by the African colonial wars in the 1960s; the state’s commitment to gender equality, legally enshrined in the 1974 postrevolutionary constitution; and the fact that the structure of the labour market in Portugal, as in the rest of Southern Europe, is hostile to part-time work (Fishman, 2003, 2010; Ferreira, 1998). Despite this high participation rate, during the 1990s fertility rates remained slightly above those of Italy, Greece, and Spain. This may also reflect an effort, especially on the part of the Socialist Government elected in 1996, to increase the support for work-life balance, especially through the expansion of childcare services, which is clearly reflected in the above table, and increasingly generous parental (including paternal) leave policies. It is worth noting, however, that everything Portuguese governments have done in this field has been built on a very low base, given the country’s very late-developing welfare state.

 
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