The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries

Abstract

By the early 21st century, most high-income countries have put into effect a host of generous and virtually gender-neutral parental leave policies and family benefits, with the multiple goals of gender equity, higher fertility, and child development. What have been the effects? Proponents typically emphasize the contribution of family policies to the goals of gender equity and child development, enabling women to combine careers and motherhood, and altering social norms regarding gender roles. Opponents often warn that family policies may become a long-term hindrance to women's careers because of the loss of work experience and the higher costs to employers that hire women of childbearing age. We draw lessons from existing work and our own analysis on the effects of parental leave and other interventions aimed at aiding families. We present country- and micro-level evidence on the effects of family policy on gender outcomes, focusing on female employment, gender gaps in earnings, and fertility. Most estimates range from negligible to a small positive impact. But the verdict is far more positive for the beneficial impact of spending on early education and child care.

Economic Incentives, Home Production and Gender Identity Norms

“…Although this is only one component of the entire set of home duties that spouses typically share, it is a good proxy for the gender division of household work, it is measured precisely on data normally unavailable for other countries, and can be linked to earnings and taxes. Third, while Sweden has one of the highest female employment rates and among OECD countries, as well as relatively strong attitudes in favor of gender equality (Olivetti and Petrongolo, 2017), previous work has found evidence of glass ceiling effects (Breen and Garcia-Penalosa, 2002;Albrecht et al, 2003Albrecht et al, , 2015, large motherhood penalties (Angelov et al, 2016;Kleven et al, 2019), and higher divorce rates for women who enter politics . These pieces of evidence may suggest important heterogeneities in the type and strength of gender norms 7 Our results are generally robust to other choices, such as adding 0.1 or 0.5 before taking logs.…”

One step forward? Advances and setbacks on the path toward gender equality in families and work

“…Widespread public support for early childhood care and education has been minimal in the United States and access to high quality childcare is highly stratified by social class (Chaudry, Morrissey, Weiland, & Yoshikawa, 2017). For instance, the United States spends 0.4% of GDP on childcare, the lowest among industrialized countries (Olivetti & Petrongolo, 2017). But there are a few programs that provide patchwork assistance to working parents.…”

The demand for season of birth

“…27 It is interesting to note that, while these average costs exceed our estimated WTP for achieving desired season of birth in the paper, they are of a similar order of magnitude. Given the mixed evidence on the case for paid family leave (see Olivetti & Petrongolo, 2017, for a review) it is important to note that achieving desired birth timing may be an overlooked benefit of such a policy.…”