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Table 15: Case study on family policies

Measure Parental allowance and parental leave law of 2007 (Germany)

Context Dissatisfaction with the traditional male ‘breadwinner’ model; pressure to reform traditional family policy; example of Nordic countries; expansion of public childcare

Objectives Reduce labour market risks for parents, especially young mothers; support women’s employment and equal opportunities for women and men

Expected outcomes in relation to LMS

Support women’s transitions from inactivity to employment and their progressions towards better jobs

Time frame 2007–present

Target groups Parents of young children

Delivery methods Parents apply for and receive the allowance; relevant ministry provides advice and funding; offices in charge of parental allowance provide advice and manage the measure

Mechanisms

Family policies typically target parents and prospective parents, and also employers. Although the latter may be reluctant to embrace policy changes favouring a better work–life balance, they are obliged to respect workers’ rights and may even change their own sociocultural attitudes.

Measures seem to work mostly as intended, but

unexpected effects also occur. In the German case study, although the net income of families with children in their first year increased, a few households were negatively affected by the reform and ended up having less income after the launch of the policy (Wrohlich et al, 2012). These were mainly recipients of the means-tested unemployment allowance. Contrary to the former ‘child-raising allowance’, the new one is treated as income and deducted from the welfare allowance. This negative effect on some families’ income derived from the lack of coordination between labour market reforms and family policies. Thus, the interactions between different benefits (including parental and unemployment benefits) need to be considered before launching policy actions. This was done in the UK case by providing those no longer eligible for income support with opportunities to apply for other jobseeker allowances.

Unintended effects also manifest themselves in other family policies. In Spain, following the introduction of the two-week paid parental leave to fathers, among parents eligible for the new leave, there was a lower desire to have more children compared to those not eligible. The increased labour market attachment of women and a higher involvement of parents in childcare can make both parents less willing to have more children (Farré and González, 2017).

Also, the right in Spain for parents with children under seven years of age to work part time increased LMS among some groups – for instance, causing a higher likelihood for some women to have a fixed-term rather than a permanent job. Furthermore, evidence reveals that employers preferred permanent hires of males aged 23–45 and women over 45 compared to women of childbearing age (Fernández-Kranz and Rodríguez- Planas, 2011).

Outcomes

The German reform of 2007 introduced a salary-based parental leave allowance for working parents and incentives to share parental leave between parents. The results were positive for mothers of newly born children: more women returned to work, and the employment rate of women in marginal and small part-time work also decreased, while it increased in longer part-time and full-time work. Guaranteeing women the return to their previous or comparable job within the company after their parental leave helped to prevent downward transitions in the labour market and avoid young mothers getting trapped in marginal

part-time work with limited progression opportunities. Supporting shared parental leave and introducing financial incentives for both parents to work part-time encouraged more fathers to share childcare

responsibilities and helped to reduce the discrimination of women in the labour market (Matteazzi et al, 2014). Nonetheless, the measure did not benefit all parents equally. By making the amount of parental allowance dependent on income before the leave, it incentivised women to work more hours before having children. This mostly benefited women with higher educational attainment and was of less benefit to lower-skilled women. Income-related parental allowances proved to be especially effective for higher-income groups, risking the perpetuation of LMS given that those in lower labour market segments did not get the same advantage.

The Spanish measures mentioned above were effective in a similar manner. By awarding workers with children up to seven years of age the right to work part-time, they increased the part-time employment rate almost twofold among women who had permanent contracts but were in danger of losing them. This implied the prevention of transitions downward into

unemployment, better reconciliation between work and family life and sustained income security for female workers. The extension of paid parental leave for fathers in 2007 also resulted in a significantly higher uptake of paternity leave. Mothers’ labour market attachment increased, resulting in higher employment rates for women after childbirth. Childcare sharing became more popular and lowered the motherhood penalty for women. However, the positive policy impacts were not equally strong for all in these cases: paternity leave and sharing of childcare uptakes were higher among men in stable and secure employment (Fernández-Kranz and Rodríguez-Planas, 2011; Farré and González, 2017). The Lone Parents Obligations initiative in the UK aimed at moving lone parents into work by narrowing eligibility for income support solely on the grounds of being a lone parent. It had a greater impact on transitions into work than other programmes aimed at this group of claimants. Nevertheless, transitions were not necessarily into quality jobs, and impacts were lower for people furthest from the labour market. Above all, those with recent work experience, higher

qualifications, access to a vehicle, access to childcare and favourable attitudes towards work were more likely to move into work (Avram et al, 2013).

The effectiveness of the above family policies is conditional on the individual/family preferences regarding work–life balance. Beyond this, essential for their success have been the mandatory nature of some initiatives (such as Lone Parents Obligations), the awareness of eligible people of the incentives and the flexibility of the solutions offered to parents (such as in the German example).

Policy summary: Key factors influencing