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Support for Working Families

Support for Working Families.

by JANET C. GORNICK , MARCIA K. MEYERS

What the United States Can Learn from Europe

Four decades of steady growth in female employment have gone a long way toward closing the job gap between women and men in the industrialized countries. One of the most striking changes in Europe and the United States has been the rise in employment among mothers with young children. Nearly 85 percent of U.S. mothers employed before childbearing now return to work before their child's first birthday. Although this is an encouraging trend from the perspective of gender equality in the marketplace, it is raising a new and difficult question about arrangements in the home: If everyone is working in the market, who is caring for the children?

Many parents in the industrialized countries find themselves navigating uncertain new terrain between a society that expects women to bear the primary responsibility for caring in the home and a society that expects, and increasingly requires, all adults to be at work in the market. Mothers and fathers are struggling to craft private solutions to this problem. But rather than resolving the question of who will care for children when everyone is on the job, these private solutions often exacerbate gender inequality, overburden the parents, and ultimately lead to poor-quality child care.

Although such problems are not unique to the United States, they may be more acute in this country because families have access to so little public support. The nation's policy makers and opinion leaders have been preoccupied in recent years with the promotion of "family values." Compared with most of Europe, however, this country provides exceptionally meager help to children, their parents, and the workers--mostly women--who care for other people's children. And despite the current preoccupation with getting everyone--particularly poor mothers--into the work force, the United States does much less than European countries to remove employment barriers for women with young children.

THE PROBLEM OF PRIVATE SOLUTIONS

One private solution to child care adopted by many parents in the United States is the combining of parental caregiving and part-time employment. Because the parents who work reduced hours are overwhelmingly mothers--only 42 percent of American women work full-time year round--this solution exacerbates gender inequality in both the market and the caring spheres. Part-time work schedules, career interruptions, and intermittent employment relegate many women to the least remunerative and rewarding jobs; and these employment patterns contribute to wage penalties that persist long after the children are grown. In dual-parent families with children below school age, married mothers' labor-market income accounts for, at most, a third of families' total labor-market income across the industrialized countries; in the United States, it accounts for only one quarter.

Another private solution is the combining of substitute care for children and full-time parental employment. Although this works well for some families, many others find themselves overburdened by the demands of the market and the home. Women in particular often work the equivalent of a double shift, combining full-time paid work with unpaid caregiving. In a recent article in Demography, Suzanne Bianchi concludes that despite the increase in mothers' labor-market activities, their time spent with their children remained nearly constant between 1965 and 1998. Where do employed mothers get the time? The data suggest that they do less of everything else, including housework, volunteering, engaging in leisure activities, and sleeping.

More parental employment also means children spend much more time in substitute care. Recent increases in the use of child care in the United States have been particularly sharp for children below age one, 44 percent of whom are now in some form of nonparental child care. The extensive reliance on substitute child care imposes a heavy financial burden, consuming as much as 35 percent of household income for poor working families. It also raises concerns about the quality of care in children's youngest and most developmentally sensitive years. These concerns are particularly acute in the United States, where experts conclude that nearly two-thirds of the mostly private nonparental child care settings provide only fair-to-poor care.

The private-child-care solution to the work-family dilemma creates another, often overlooked problem: It impoverishes a large, low-wage child care work force dominated by women. Child care workers in the United States are among the most poorly paid members of the work force, averaging less than $7 per hour in earnings and usually working without employment benefits or realistic opportunities for career advancement.

While parents in the United States are left largely to their own devices, parents in most European welfare states can count on child care and parental-leave benefits to help them juggle work in the market and in the home. Although these policies have not fully resolved the problems of gender inequality and parental overburdening, they provide encouraging lessons about how government can help parents strike a balance between caring and earning.

Key to realizing greater gender equality in both the workplace and the home is recognizing that mothers and fathers alike deserve support in their market and caregiving roles. For a number of years, feminist scholars in Europe and the United States have debated the meaning of a woman-friendly welfare state. A universal-breadwinner perspective calls for welfare-state provisions that support and equalize women's employment attachments--for example, by providing extensive public child care. An opposing caregiver-parity perspective calls for provisions that grant women "the right to time for care" and remunerate women for care work performed in the home through generous maternity pay and other caregiver benefits.

Neither perspective fully resolves the tension between work and family life while promoting gender equality. Both fail to provide a satisfying vision of the welfare state--in part because they do not address the issue of fathers as caregivers. Women's widespread assumption of greater market responsibilities has not been equally matched by fathers' assumption of child care responsibilities in the home. Although men's involvement in caregiving appears to be on the rise, Bianchi estimates that married fathers in the United States spent just 45 percent of the time their wives spent on caregiving in 1998--an increase of only 15 percentage points since 1965.

A bridge between the universal-breadwinner and caregiver-parity perspectives may lie in social policies that promote what British welfare-state scholar Rosemary Crompton calls the "dual earner/dual carer" society. This is a society in which men and women engage symmetrically in both paid work in the labor market and caregiving work in the home. Central to the dual earner/dual carer solution is the recognition that both mothers and fathers should have the right and opportunity to engage in market and caregiving work without incurring poverty in terms of money or time. For families with very young children (say, younger than age three), mothers and fathers would have the right to take substantial time off from market work to care for their children, without loss of income. For families with children from age three to school age, both parents would have the right to engage in flexible and reduced-hour employment, and they would have access to affordable, high-quality substitute child care.

This solution assumes that men would re-allocate substantial portions of time from the labor market to the home while their children are young. Hence, as American political theorist Nancy Fraser has suggested, "men [would] become more like women are now" in the allocation of their time.

The sweeping transformations of market and gender relations necessary to achieve a gender-egalitarian dual earner/ dual carer society are obviously not imminent. But the steep rise in maternal employment in recent years and the more modest rise in men's caregiving time suggest that some form of dual earner/dual carer arrangement is already the reality for many families in the industrialized world. Given this reality, what can government do to help such families now and to promote greater gender equality in the future? The United States is arguably a leader in rhetorical support for the family and for equal employment opportunities--but it's a clear laggard in making the rhetoric meaningful. U.S. policy makers could take a lesson from the European welfare states, which finance extensive parental leaves during the earliest years of children's lives and provide high-quality early-childhood education and care services for older preschool children. Increasingly, these countries also incorporate incentives that encourage men to assume a larger share of caregiving work in the home.

FAMILY LEAVE

Although their family support programs vary substantially, nearly all of the industrialized welfare states provide generous maternity, paternity, or other parental leave during the first year of childhood, typically funded through some combination of national sickness, maternity, and other social-insurance funds. The most substantial leave benefits are provided in two Scandinavian countries that have consolidated maternity, paternity, and other parental-leave schemes. Norwegian parents are entitled to share 52 weeks of leave with an 80 percent wage replacement (or 42 weeks with full wage replacement) following the birth of a child, while Swedish parents can share a full year of leave with nearly full wage replacement, followed by three additional months at a lower rate. Most continental European countries provide somewhat shorter maternity leaves--usually three to five months--but they pay relatively high replacement rates: 80 percent to 100 percent.

Even beyond the child's first birthday, parents in some European countries have rights to partial leave and reduced-hour employment. In Denmark, for example, mothers have a right to 28 weeks of maternity leave after childbirth with high wage replacement, and fathers have a right to two weeks of paternity leave; once these leaves are exhausted, the parents can share 10 weeks of parental leave with high wage replacement, and then each parent is entitled to 13 weeks of child care leave at 80 percent of the parental-leave benefit level. Finnish parents can choose to stay on leave for up to three years while receiving a low, flat-rate benefit. And Swedish parents have the right to work as little as six hours per week, with job protection, until their children are eight years old.

Although generous leave policies have economic and social benefits for families with very young children, they can create new forms of gender inequality. The total percentage of paid parental-leave days taken by fathers amounts to less than 10 percent across the European welfare states and less than 3 percent in many. Because leaves are taken overwhelmingly by mothers, many women pay a price for their long absences from the labor market in the form of lost human capital and career advancement.

Several of the Scandinavian countries are addressing the gender gap in parental-leave taking by creating incentives for fathers to take the leave to which they are entitled. The most critical of these incentives is high wage-replacement rates. Because men tend to have higher wages than women, in the absence of full wage replacement it often makes economic sense for couples to decide that the mother should withdraw from the labor market. The 80 percent to 100 percent wage-replacement rates in most of the European countries reduce the economic disincentive for fathers to take full advantage of leave benefits.

A second important gender-equalizing policy is the granting of individual or nontransferable leave benefits to fathers as well as to mothers. In Norway and Sweden, four weeks of parental leave are reserved explicitly for fathers; in Denmark fathers have a right to two weeks of paternity leave. In all three countries, leave time reserved for the father but not taken is lost to the family. These "use or lose" provisions encourage parents to participate more equally in leave-supported caregiving. The Scandinavian welfare states have taken active steps to promote fathers' use of leave benefits. In the late 1990s, the Swedish government engaged in a public campaign to educate employers and unions about how fathers' parental leave can be good not just for families but for work organizations and society. Norwegian policy expert Anne Lise Ellingsaeter reports that in her country government officials are now pushing fatherhood onto the political agenda: "While employment for women was the main issue of policies in the 1980s" she suggests, the 1990s brought in "the caring father, and thus the domestication of men." The emphasis on fathers is expanding beyond the Scandinavian countries as well. Italy, for example, instituted use-or-lose days in 2000.

The European welfare states also provide instructive lessons about how to finance parental-leave benefits. Nearly all of the European leave programs are funded through either social-insurance schemes or general tax revenues. None relies on mandating employers to provide wage replacement for their own employees. Those countries in which social-insurance funds draw heavily on employer contributions do not "experience-rate"--that is, adjust contributions to reflect the number of leave takers at the firm level. These financing mechanisms reduce employer resistance by spreading the cost among employers and by supplementing employer contributions with general revenue funds. By reducing the cost to individual employers, these mechanisms also minimize the risk that employers will discriminate against potential leave takers who might otherwise be seen as unusually expensive employees.

How costly are these leave schemes? Spending on maternity, paternity, and parental leave is substantial and is rising in nearly all the European welfare states. Costs relative to population and gross domestic product (GDP) are surprisingly modest, however. As of the middle 1990s, annual family leave expenditures per employed woman (in 1990 U.S. dollars) were about $900 in Sweden and Finland, and about $600 to $700 in Norway and Denmark. France spent a more moderate $375 per employed woman. The higher-spending Scandinavian countries invested approximately 0.7 percent to 1.0 percent of GDP in family leave, while France spent 0.35 percent.

CHILD CARE

The European welfare states provide another critical form of support for dual earner/dual carer families and for gender equality in the form of high-quality, public early-childhood education and care. They have developed two distinct models. The model in the Scandinavian countries is an integrated system of child care centers and organized family-day-care schemes serving children from birth to school age, managed by social-welfare or educational authorities. Nearly all employed parents have access to a place in the public child care system with little or no waiting time, and enrollment rates are high. In Sweden and Denmark, for example, one-third to one-half of children under age three are in some form of full-day, publicly supported care, along with 72 percent to 82 percent of children between the ages of three and five.

The model developed by the continental countries of France and Belgium is a two-phase system of child care. For younger children, full-day child care centers (creches) and some publicly supervised family-day-care schemes are provided under the authority of the social-welfare system. Beginning at age two and a half or three, children are served in full-day preprimary programs, the ecoles maternelles, within the educational system. Enrollment of young children in creches is high (30 percent in Belgium and 24 percent in France); it's nearly universal in the ecoles maternelles for preschool-age children.

Although a large child care sector would seem to be unambiguously positive for gender equality in employment, it can exacerbate inequality if it impoverishes women who work as child care providers. In the European countries, although the child care sector is also mainly women, a large share of child care workers are public-sector employees. As such, they benefit from the good public-sector wages and benefits common in Europe. Relatively high wages for child care workers are tied to high standards for the education and training of child care professionals, who are typically required to have three to five years of vocational or university training. Higher educational standards have benefits that extend beyond the economic welfare of female child care workers. They also increase the quality of care that children receive.

Like leave benefits, early-childhood education and care services in European countries are financed largely by the government. Funding is provided by national, state or regional, and local authorities, with the national share typically dominant in services for preschool-age children. Care for very young children and, to a lesser extent, for preschool children is partially funded through parental co-payments that cover an average of 15 percent to 25 percent of costs. Because co-payments are scaled to family income, lower-income families typically pay nothing and more affluent families pay no more than 10 percent to 15 percent of their income.

Child care expenditures are large and growing in the European welfare states but--like leave expenditures--are modest in per capita terms. Total spending on direct child care in the mid-1990s was about $2,000 per child under age 15 in Sweden and Denmark; it served a large share of all children under the age of seven and many school-aged children in after-school care. In France expenditures totaled a little over $1,000 per child under age 15; they served nearly all three- to-five-year-olds and about one-quarter of children under age three. These investments in early-childhood education and care constituted about 1.6 percent to 2.2 percent of GDP in Sweden and Denmark, and about 1 percent in France.

On all fronts, the United States lags behind Europe to a remarkable extent. The United States stands out as one of only a few countries in the entire world that fail to provide any national program of paid maternity leave. Until 1993 this country lacked even job protections for women at the time of childbirth. With the passage of the Family and Medical Leave Act (FMLA), workers in firms with at least 50 employees were granted rights to 12 weeks of unpaid, job-protected leave each year for childbirth or adoption or to care for a seriously ill family member. The exclusion of small firms leaves an estimated one-half of the U.S. work force without even this rudimentary benefit. Additionally, the absence of wage replacement presents an obvious problem: The congressionally established U.S. Commission on Leave reports that 64 percent of employees who need but do not take FMLA-based leave indicate that they cannot afford the loss of wages.

Some families in the United States receive short periods of paid leave through employer-based disability benefits. Five states provide public Temporary Disability Insurance (TDI) programs. Because the Pregnancy Discrimination Act applies to these programs, new mothers have a right to short periods of paid leave if they have either private or public disability benefits. As of the early 1990s, however, only an estimated one-quarter of U.S. working women had coverage under these laws. The Institute for Women's Policy Research found that weekly benefits paid through the TDI programs average only $170 to $200 and that the duration of benefit claims ranged from five to 13 weeks.

The United States also stands out among industrialized countries for its paucity of public child care assistance. Unlike most of Europe, it has never embraced a national system for universal provision, funding, or regulation of early-childhood education and care. More than 40 percent of American children under age five spend 35 hours or more per week in non-parental care, and another 25 percent spend 15 to 35 hours.

Substitute care in this country is overwhelmingly private in both provision and financing. The U.S. government spends about $200 on direct child care assistance per child under age 15--about one-tenth of the spending in Sweden and one-fifth of that in France. Assistance is provided through two primary mechanisms: (1) means-tested subsidies, available on a limited basis for low-income families with employed parents, and (2) early-childhood education programs (mostly through the means-tested Head Start program) and state prekindergarten programs. Children in the United States now routinely start public school at a young age; about one-half of four-year-olds and 89 percent of five-year-olds are in (usually) part-day prekindergarten or kindergarten programs. But as few as 5 percent of children age three and younger, and of older preschool children outside prekindergarten and kindergarten, are in any form of publicly subsidized or provided care.

Some observers justify miserly child care expenditures in the United States by pointing to tax benefits for families who use child care. The federal government and several state governments exempt a portion of child care expenses from personal income taxes. While the federal Child and Dependent Care Credit is now used by a large number of families, low-income families with no tax liability receive no benefits, and the actual benefit for others is low. As of the mid-1990s, the federal tax credit expenditures totaled about $47 per child under the age of 15.

Unfortunately, the United States gets what it pays for. Minimally regulated private-child-care arrangements provide uneven and generally low-quality care. A research team from the National Institute of Child Health and Human Development recently estimated that only 11 percent of child care settings for children age three and younger meet standards for "excellent" care. In part, quality is poor because the care is provided by a minimally educated and inadequately trained work force. According to data collected by Marcy Whitebook of the Center for the Child Care Workforce, some 22 percent to 34 percent of teachers in regulated child care centers and family child care settings do not have a high school diploma; Ellen Galinsky, president of the Families and Work Institute, reports that in unregulated family-and-relative child care settings, between 33 percent and 46 percent of caregivers have not completed high school.

Child care providers are a poorly educated work force in large part because families cannot afford to pay more highly trained professionals. Full-time child care for a four-year-old averages between $3,500 and $6,000 per year--more than college tuition at many state universities. Yet despite this expense, child care workers often earn poverty-level wages. Whitebook estimates that they earn an average of $6.12 per hour--slightly less than parking lot attendants and one-third the average salary of flight attendants.

Many of these poorly paid child care workers are women of color. And many are immigrants from developing countries who are in search of better economic prospects--and who often leave the care of their own children to even poorer women in their home country. [See Arlie Russell Hochschild, "The Nanny Chain" TAP, January 3, 2000.]

Although the European welfare states could teach the United States much about child care, they have not completely solved the dilemma of providing gender-egalitarian support for dual earner/dual carer families. The supply of child care for children under age three is very limited in many countries, and for older preschool children in some. Also, both short- and longer-term leaves are still used overwhelmingly by mothers. A fully egalitarian package of family support policies is not completely realized even in the progressive Scandinavian countries, but there at least the framework for such policies is in place.

Learning across borders may have considerable cachet in contemporary policy debates, but drawing lessons from the European welfare states has fallen out of favor. Resistance to lessons from overseas has been fueled by vivid press reports of the collapse of the European welfare states. American reporters, particularly in the mainstream print and financial media, have been preoccupied in recent years with the death of the European welfare state. In 1992 the Los Angeles Times noted that "Britain ... finished dismantling much of its welfare system in the 1980s under former Prime Minister Margaret Thatcher." The San Francisco Chronicle reported in 1993 that "nowhere is the dismantling of the social security net more drastic than in Sweden, ... [though] similar retreats from the expansive days of social democracy are under way in virtually every European Community nation." And in 1995 BusinessWeek reported that "France ... in recent weeks has been at the center of what may well be the last great Continental convulsion in this century: the dismantling of the European welfare state."

THE POPULAR WELFARE STATE

As Mark Twain is said to have observed about premature rumors of his demise, reports of the death of the European welfare state turn out to be greatly exaggerated. Spending trends in Europe suggest that while some countries have taken steps to curtail certain areas of program growth, overall social spending continued to rise throughout the 1980s and 1990s. Growth in expenditure was particularly steep in programs that support families and children. Between 1980 and the mid-1990s, per-child spending on family policy in the Western European countries increased by 52 percent. Within the arena of family policy, the growth in expenditures on maternity and parental leaves was quite high: Across Western Europe, average spending per employed woman doubled during this period.

Rising investments indicate that political support for family policies is strong in the European countries--a finding that is confirmed by public opinion research. Family policies are popular mostly because they are universally available. Family leave and child care have been institutionalized as middle-class benefits that support new parents, relieve parents of the financial burden of private child care, and provide high-quality early education for children--all without stigmatizing or isolating recipients. The public sees these programs as providing broader social benefits as well. Cross-national policy research has linked generous leave and child care benefits in Europe to much lower child poverty rates than in the United States, and to less disruption in employment among mothers with young children.

Steadily growing investments in family policies suggest that the European welfare states remain committed to supporting dual earner/dual carer families. Translating these policies to the U.S. context remains challenging. One obvious concern is expense. One way to approach the question of cost is through a thought experiment: What if the United States were to commit the same share of its GDP to family policy as the Europeans do? This country currently spends about 0.2 percent of its GDP on child care and a negligible amount on leave. In contrast, France spends about 1.4 percent of its GDP on a generous policy package of family leave and early-childhood education and care. If the same spending share were applied to the U.S. GDP, we'd be looking at about $100 billion annually. As of the mid-1990s, U.S. expenditures on early-childhood education and care totaled only about $15 billion. Thus, in order to provide a package of leave and child care benefits similar to the one available to French families, we would need an additional $85 billion per year.

This figure very likely represents a high-end estimate. The actual bill would probably be lower than these figures suggest since children generally start school at a younger age in the United States than m France. It would also be lower if financing similar benefits consumed a smaller share of the GDP in the strong U.S. economy. Costs would be lower still if policies were partially means-tested or taxed for higher-income families. And recent research suggests that some of those expenditures would be recouped by productivity gains associated with lower employee turnover, fewer work absences, and a less stressed-out work force.

Nevertheless, it is clear that comprehensive family policies would require substantial new investments in the United States. Whether these investments are affordable is a relative question. It is easy to find examples of spending that might be used to off-set new investments in family policy. According to the Center for Popular Economics, federal aid to U.S. corporations amounts to $75 billion to $200 billion a year. Former Assistant Secretary of Defense Lawrence Korb and the Center for Defense Information (founded by retired generals and admirals) have argued that the U.S. military budget could be cut by more than $150 billion a year without sacrificing high levels of military readiness. The United States could also find family policy revenues closer to home, by capping a variety of federal tax benefits that primarily reach our most affluent citizens. The mortgage interest deduction alone costs nearly $60 billion a year, local property tax deductions for homeowners cost $14 billion, and the exclusion of capital gains on inherited property costs $25 billion. [See Nancy Folbre's article "Leave No Child Behind?" on page 20.]

Providing real support for America's working families would require an exercise of collective political will. Fortunately, there are some hopeful signs. As more and more families find themselves squeezed for time between the demands of the workplace and the home, support for more expansive family policies may be growing, especially as parents find their budgets squeezed by the price of even mediocre child care. A recent survey conducted for the think tank Zero To Three found that four in five adults support "paid parental leave that allows working parents of very young babies to stay home from work to care for their children." Policy officials are taking at least tentative steps in the direction of policy expansion. Forty-two states now have some form of prekindergarten services. In June 2000, the U.S. Department of Labor issued regulations that allow states to extend unemployment insurance to mothers out of work owing to childbirth. By cross-national standards, these developments are meager. But they may signal a welcome shift in the United States from rhetoric to action in the valuing of children, families, and equal opportunities for women.

JANET C. GORNICK teaches public policy at the City University of New York. MARCIA K. MEYERS teaches social work and public affairs at Columbia University. They are collaborating on a book about family policy and gender equality.

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