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Child Allowances and Work-Family Reconciliation Policies: What Best Reduces Child Poverty and Gender Inequality While Enabling Desired Fertility?

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Abstract

Recent legislative proposals in the United States to either institute a child allowance for all families or continue a temporary Covid-related child tax credit similar to an allowance have reignited a debate about family allowances, and whether direct monetary subsidies to families with minor children have unintended consequences for gender inequality and mothers’ labor market success. Advocates for work-family reconciliation policies argue that policies providing paid time off and flexibility in work hours and schedule should enable women to assume financial responsibility for their children and, thus, increase intended fertility without diminishing the quality of care provided to children, while encouraging men to participate more in the domestic sphere. We summarize the limited but growing evidentiary basis for both policy viewpoints, reviewing hundreds of studies on policy implementation and outcomes across rich industrialized countries, comparing the results in terms of their effects on child poverty, gender inequality, and intended fertility.

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Notes

  1. The American total fertility rate was 1.64 in 2020 (Hamilton, Martin, & Osterman, 2021).

  2. In addition to the Biden administration’s American Rescue Plan Act of 2021, temporarily expanded Child Tax Credit, and the proposed Build Back Better Act of 2021, Republican senators have proposed less generous child allowances in the Family Security Act 2.0 and paid leave in the New Parents Act of 2021.

  3. Until the recent 2023 Pregnant Workers Fairness Act, which requires employers with at least 15 employees to make “reasonable accommodations” for pregnancy, pregnant workers were only entitled to equal treatment with other temporarily disabled workers – if employers offered no protections, pregnant workers could be forced onto unpaid leave or fired for cause. Caregivers are tangentially protected from workplace discrimination under Title VII of the Civil Rights Act of 1964, inasmuch as women with children may not be discriminated against because of their status as parents or caregivers in a way that men with children are not. Importantly, these laws do not provide affirmative support for caregivers but allow standing for a lawsuit in case of unlawful discrimination.

  4. The FMLA provides twelve weeks of unpaid leave but is limited to those employed for at least 12 months for at least 1250 h with their employer, and whose work location employs 50 or more employees within 75 miles.

  5. The most notorious recent example of this was the use of federal block grant welfare funds by the governor of Mississippi to pay for a volleyball stadium desired by former NFL football star Brett Favre (Wolfe, 2022).

  6. As of 2022, the OECD countries include Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.

  7. Del Boca (2015) finds most European maternity leaves run between 18–22 weeks and restore mothers’ pay at 80%.

  8. We include within women’s labor force participation those studies that address the labor force participation of mothers. This is especially relevant for causal studies identifying any effect of a family-oriented policy or reform, where mothers are the only women whose labor force participation could be affected.

  9. We searched “work-family reconciliation policies” without quotations to discover all sources that address work-family conflict or family policies; then also searched for specific policy referents: (1) child care, (2) paid leave (of all types including parental leave), and (3) flexibility or other work-time accommodations (including work-time flexibility, flextime, part-time work, and schedule control).

  10. Thévenon et al. (2018) report an association across OECD countries of a 0.3% higher absolute poverty rate with a 1% increase in the proportion of single-parent households.

  11. Similarly, Elmallakh (2021) identified an increase in French parents’ work hours after the reduction of a child allowance, in which their work hours increased roughly to the cash equivalent of the decline in benefits.

  12. Similarly, when East German mothers were able to substitute informal for formal childcare, scholars also found no impact on their labor force participation (Gathmann & Sass 2018). A reform increasing a cash-for-care subsidy to parents who cared for their children at home in one state of East Germany in essence increased the cost of using free public childcare because parents forewent the subsidy payment. Because families were able to substitute at-home care and informal care measures for public childcare, the reform did not impact mothers’ labor force participation.

  13. The positive effect of parental leave seems especially strong as women first become mothers: in Luxembourg, the introduction of a parental leave of six months for each parent increased mothers’ number of hours worked for the three years after their first child compared to before the reform, but the policy only boosted work hours for mothers of two children for the first year (Valentova 2019).

  14. The child allowance payout necessary to raise the precipitously low fertility rate in Korea up to 1.5 would have been 44 million Korean won, almost doubling the annual average regional per capita income found during the study, so while Son (2018) found the child allowance was associated with fertility growth, the impact was too small, and the cost too high, for child allowances alone to drive a meaningful change in Korean fertility.

  15. See also González & Trommerlová (2021), tracking the rise and fall in fertility rates (and the fall and rise of abortion rates) with the establishment and repeal of a lump-sum maternity payout in Spain.

  16. The Alaskan Permanent Fund Dividend is paid to all Alaskan residents, not simply to parents, but its impact on parents is analogous to the impact a child allowance might have.

  17. In the Baby’s First Year study, where 1000 American mothers were given monthly stipends of either $333 or $20 after the birth of a baby (Noble et al., 2021), the cash boosted household income, though its impact on maternal employment was unclear. The study participants had an overall 1 percent decrease in the probability of employment, with a 6 percent decrease for those mothers who received the larger cash gift (Sauval et al., 2022). However, because the study occurred during the Covid-19 pandemic, and because mothers who received the larger gift indicated a greater reduction of contact with others to limit spread of the illness, the authors note that the decrease in employment may have also reflected a desire to limit contact outside of the family (Sauval et al., 2022).

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Funding

This research was supported by grants (P2CHD042849 and T32HD007081) from the Eunice Kennedy Shriver National Institute of Child Health and Human Development to the Population Research Center at The University of Texas at Austin.

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Correspondence to Jennifer Glass.

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Glass, J., Waldrep, C.E. Child Allowances and Work-Family Reconciliation Policies: What Best Reduces Child Poverty and Gender Inequality While Enabling Desired Fertility?. Popul Res Policy Rev 42, 82 (2023). https://doi.org/10.1007/s11113-023-09823-w

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