No activation without reconciliation? The interplay between ALMP and ECEC in relation to women's employment, unemployment and inactivity in 30 OECD countries, 1985–2018

Abstract

Comparative welfare state research as examined the outcomes of active labour market policies (ALMP) and work‐family reconciliation policies by and large been separately. As a result, potential complementarities between these policy areas have received scant attention empirically. Using macro‐level data, this study answers the question to what extent, and in which way, governments' efforts in ALMP and in early childhood education and care (ECEC) services are complementary to each other in promoting women's employment rates and reducing women's unemployment and inactivity rates in 30 OECD countries from 1985 to 2018. The article theorises about how the various policies that constitute a welfare state relate to each other, distinguishing between pluralism, complementarity and substitutability. These findings provide support for the notion of welfare pluralism, in the sense that ALMP and ECEC policies work together in improving women's employment rates in slightly different ways: ALMP achieve this through reducing women's unemployment rates, whereas ECEC also achieve lower inactivity rates for women. There was, however, more support for the notion of substitution rather than complementarity: the marginal benefits associated with an increase in either ALMP or ECEC were smaller in the context of large investments in the other policy. In other words, the highest rates of women's employment, and the lowest rates of unemployment and inactivity, are found in countries with large investments in both ALMP and ECEC, but such higher investments are associated with diminishing returns.

Social investment as a conceptual framework for analysing well-being returns and reforms in 21st century welfare states

“…Hemerijck et al (2016) showed that the positive association between investments in ALMPs and employment is stronger when investment in ECEC services is higher, especially for specific risk groups. Similar findings have more recently been exposed by Nieuwenhuis (2022) on the complementary nature of ALMP and ECEC policies on female employment. Bakker and Van Vliet (2021) found diminishing marginal returns between the same two policies.…”

“…Inclusive buffers, for example, aim at reducing poverty, but can also ease the labour market flow by improving job matching and reducing skill depletion (Gangl, 2006). Childcare services are aimed at boosting human capital stock, but can also facilitate labour market flows (Plavgo and Hemerijck, 2021;Nieuwenhuis, 2022). However, it should be recognized that stock, flow and buffer policy considerations are subject to highly diverse socio-economic dynamics.…”

“…Notwithstanding conceptual headway, the conjecture of a social investment life-course multiplier, however plausible through the lens of extant macro-level evidence (OECD, 2014;Hemerijck, 2017;Plavgo and Hemerijck, 2021;Nieuwenhuis, 2022), continues to be short of micro-empirical foundations: we still do not know whether and how bundles of stockflow-buffer policies enhance citizens' social and labour market inclusion over the life course, and how these interact at a macro level. Empirical research efforts need to be explicitly geared towards a better understanding and assessment of the interaction effects between different policy provisions across space and time.…”

“…Also, quality ALMP can serve to mitigate the potential moral hazard predicament attached to out-of-work income buffers, improving instead of hindering job search and job matching (Ronchi, 2019). The effectiveness of any given policy, like ALMP, often depends on the availability of other social policies, such as childcare services in combination with other work-family reconciliation policies (Hemerijck and Plavgo, 2021;Nieuwenhuis, 2022).…”

“…Pooled time-series and panel data research designs are particularly useful in cases of sufficient over-time variation in the policies of interest. Some examples of establishing macro regularities in the social investment literature, although not directly aimed at testing the life-course multiplier conjecture, can be found in Van Vliet and Wang (2015), who study poverty outcomes, and Bakker and Van Vliet (2021) and Nieuwenhuis (2022), focusing on employment outcomes. Typically, such crosscountry analyses are based on population aggregates.…”