This paper discusses the potential of family policies to reconcile the multiple objectives that they are expected to serve, over and above their role in offsetting the economic cost of children. We start by emphasizing the need to consider the multiple challenges that family policies in European Union—and/or OECD—countries have to address through a broadening of the standard economic approach to the cost of children. Policies indeed aim to reduce the “direct” monetary cost of raising children, but they also aim to minimise the indirect cost arising from the incidence of children on the parents’ work-life balance and on the aggregate level of employment. Moreover, motives for policy intervention such as concerns about child development, gender equity or aggregate fertility levels are not fully captured by cost measurements. We thus analyse how, and to what extent, family policies can successfully reconcile these multidimensional objectives. We offer a holistic approach, pointing out that a coherent family policy mix supporting working parents with preschool children is the only way to reconcile or limit the conflicts between work, family and child outcomes. Three main dichotomies are identified to explain cross-country differences in family policy packages: the emphasis on poverty alleviation; the supposed antagonism between fertility and female employment; and the potential conflict between this latter and child development. Ways to reconcile these objectives and to improve the effectiveness and efficiency of family policies are further discussed.
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Action and development plan for the economy of the European Union between 2000 and 2010, set out by the European Council in Lisbon in March 2000. One explicit objective of this plan is to raise female employment rates to min. 60 % in all European countries, and to develop formal childcare services accordingly.
The analysis of indirect costs is limited to measurable, indirect economic costs. Non-economic indirect costs or economic indirect costs that appear only in the medium and long term are not taken into account by most statistics (as for example the loss of networks and social contacts or the loss of skills which can reduce future income options…).
Most research in the United States emphasises that maternal employment can have negative consequences for the cognitive development and health of children during their early years (Han et al. 2001; Brooks-Gunn et al. 2002; Baum 2003; Ruhm 2004a, b; Baker et al. 2005). However, another series of studies find a mitigated effect of parents’ employment and even a negative effect on child development of childcare provided permanently and exclusively by mothers (Gregg et al. 2005; Waldfogel et al. 2002).
Most of the available evidence on preschool experiments shows positive effects on pupil and student outcomes (Currie 2001; OECD 2011; Huerta et al. 2011). However, some studies point out negative impacts of early enrolment in day care centres or kindergarten on behavorial outcomes or test scores (Lefebvre et al. 2011; Smith 2011). Overlong hours spent in childcare centers are potential factors for explaining why the low-fee childcare policy did not have the expected positive influence on child outcomes in Quebec (Lefebvre et al. 2011). This hypothesis is accredited by Datta-Gupta and Simonsen (2010) who found for Denmark that increasing hours in family daycare from 30–40 to 40–50 h per week and hours in pre-school from 20–30 h per week to 30–40 h leads to significantly lower child non-cognitive outcomes.
Basically, Heckman and Masterov (2007) argue that investments during early childhood provide a means to benefit from the complementarities that exist when young children acquire cognitive and social capacities, as the acquisition of these capacities at an early age favours self-production of human capital. Higher investment at very young ages would reduce the investments required at later stages, so that early spending can in fact lower later expenditures.
Prolonged periods out of work affect career development and are key determinants of the so-called “family pay gap” that measures the lifetime differential in earnings between mothers and childless women. In Sweden, for example, taking 16 months of parental leave negatively affects career profiles (Eversston and Duvander 2010). Available evidence for France and Germany suggests that extending paid leave increases the likelihood of precarious employment conditions after the return to work and reduces the wage growth of those who take prolonged leave by 5–20 % (Meurs et al. 2010; Ondrich et al. 2002); while differences decrease over time they are still observable long after the return to work. Nevertheless, some evidence for Canada suggests that despite substantial income losses incurred by mothers in the first 2 years after childbirth, mothers returning to work seem to regain the lost earnings within about 7 years, and this recovery is quicker for mothers who go back to work with their original employer.
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This paper builds upon reports made for the European Commission (Letablier et al. 2009) and from OECD (2011), Doing Better for Families, to which the authors have contributed, and is complemented by additional material. Willem Adema, Maria Huerta and Dominic Richardson are especially thanked. The views expressed cannot be attributed to the OECD or its Member governments; they are the responsibility of the authors only.
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Thévenon, O., Luci, A. Reconciling Work, Family and Child Outcomes: What Implications for Family Support Policies?. Popul Res Policy Rev 31, 855–882 (2012). https://doi.org/10.1007/s11113-012-9254-5
- Family policy
- Costs of children
- Child poverty
- Women’s labour market participation
- Work-life balance