The relative generosity of the EU-15 member states’ child policies

The main purpose of this project is to analyse the influence of labour market conditions and social policies on the fertility decisions of young people in order to contribute to the design of better policies at European and national levels to facilitate combination of parenthood and work. Chapter I presents a broader picture on women's current labour force participation according to motherhood status in the 15 countries of the former EU. The chapter also discusses related European Union policies. More in particular, the chapter examines the influence of the presence of children on labour force participation of women in comparison with that of men. It further explains how men and women allocate differently their time between paid and unpaid work, for example, housework and childcare activities. The chapter finally looks at the influence of the presence of children on wages of men and women. The most important policy-relevant finding is that labour market policies should be aimed to encourage women's participation by reducing the costs of working, while social policies should help women to better reconcile work and motherhood. In particular European countries where less women work need more flexible labour markets (with more part-time and self-employment opportunities, without wage penalty), more husbands sharing responsibilities in domestic tasks, especially when there are children and public policies to increase childcare services, the length and co-division with the partner of parental leaves. Chapter II shows a summary of the detailed and in-depth analyses of those state interventions that are likely to affect women's fertility decisions and the opportunities for women with children to work in the market. Particularly, the chapter explains the indicators that measure each EU-15 member state's generosity in each of the three fields of family friendly policies, namely public childcare, care leaves (maternity and paternity leaves) and child tax and cash benefits. The chapter also gives a brief overview on existing welfare states and gender regime typologies and evaluates our contribution to the discussion on this field. It is found that the methodology of looking into a very wide range of different elements that are likely to affect parenthood choices and summarising this information into synthetic indicators as well as the fact that we essentially use very precise quantitative data or quantify qualitative information produces results that are considerably more subtle than those put forward by less targeted and less detailed studies that risk giving a false picture of the real-life situation of working mothers throughout Europe. A robust country classification is established based on these synthetic indicators. A whole list of policy recommendations is set forward regarding childcare systems (universal coverage in high-quality public childcare facilities that operate long hours and at low cost), child cash and tax benefits (generous universal cash rather than tax benefits that are granted independently of parents' work status and income level and that are conceived as an individual right of each child, encourage women to have a first and maybe a second child while they pursue their professional career., individualization of the tax and social security system), maternity leave schemes (18-weeks compensated at a 100%, short qualification period, maternity leave should be clearly distinguished from any system of parental leave, employment should be protected guaranteeing the return to one's previous job and to identical employment conditions, paternity leaves should be extended within similar framework conditions and should also immediately follow childbirth), and parental leaves (this leave should be short and part-time take-up should be possible to safeguard employability, it should be compulsory for parents to share the leave between them). After presenting some crucial figures on recent fertility trends, Chapter III summarises micro-econometric analyses on motherhood choices in various countries. The main policy-relevant results that came out from these studies were that an increase in the upper family income level and a widening of opening hours of public childcare in Italy are bound to increase female labour supply, while decreasing the price of public childcare will only make families switch from private to public childcare. Moreover, long labour force interruptions for mothers advocated by traditionalists are damaging to overall labour force participation. The negative wage effect differes considerably across countries. Finally, institutions are shown to matter because although education postpones motherhood in all the countries studied, the size of the effect differs between the countries. In order for there to be an effect from education on postponement of maternity there has to be a labour market that demands skilled female labour and skills have to make a difference for the sort of career a woman can expect. Both past incomes and savings, labour market career in the past, current and expected future situation matter for both the woman and for the man, for their decisions on when to form a couple and have a child. The conclusion to the final report establishes links between the three previous chapters. How is women's labour market attachment interacting with their fertility choices and how do public policies intervene? A substitution effect and an income effect play in opposite directions for women. The income effect is generally found to determine men's, and more particularly fathers', choices whereas for women, it is much less clear to what extent both effects interact in their employment and fertility decisions. An outline and discussion is presented of the different types of employment costs induced by motherhood. A general description of adjustment mechanisms regarding fertility and labour market activity in relation to public policies folows, a framework which is then applied to the set of countries studied. On the basis of this work, a country typology is established to reflect diffrences in the generosity of public policies towards dual-earner families with children throughout the former EU-15.