POSICION DE GARANTE SEGÚN LA CORTE SUPREMA DE JUSTICIA

x-axis: participation and employment (in percentage); y-axis: fertility rate (average number of children per woman)

BE

denotes the average participation rate for the euro area

30 40 50 60 70

denotes the average employment rate for the euro area denotes the average fertility rate for the euro area

Source: Eurostat.

Note:

1) 2005 for Spain and Italy fertility fi gures.

2) Countries for which no data were available for 1992 or before have been omitted.

POLICIES AND THEIR EFFECT ON LABOUR SUPPLY

These different country groups refl ect differences in policies affecting labour market participation and fertility across countries. Policies that aim to simultaneously increase both fertility and labour market participation rates must focus on two issues: fi rst, increasing the labour supply of parents that do not yet participate in the labour market; and second, working females (or future parents) who are considering the fertility decision. Here, the opportunity cost of having a child, in terms of labour market withdrawal and possible negative consequences for the female career, may have a particularly strong impact on the fertility rate of highly skilled women. Different, non-exclusive, systems can be implemented, including the following three possible solutions – increasing the availability and lowering the cost of child care, parental leave and part-time work opportunities.

Interestingly, two of the success stories, in terms of female employment rates, namely the Netherlands and Finland, use very different policy mixes. In the Netherlands, fl exible working hours and a high percentage of part-time work in total employment appear important for both high participation and fertility (most children do not attend full time childcare), while in Finland, high full-time employment and fertility is supported by a developed childcare and extensive parental leave system (see Box 7). The next sections will consider these systems and their effect on participation and fertility decisions in greater detail.⁸⁶

4.2.2 AVAILABILITY AND COST OF CHILDCARE It is widely documented that well-designed childcare opportunities have a positive impact on

female participation (see, for example Bassanini and Duval, 2006) and allow parents to continue with full- or part-time work after having a child.

However, the availability and fi nancial cost of childcare systems are important. When childcare provided through the market is too scarce or too expensive, one parent, usually the mother, often stays at home to take care of the children until they go to school. This not only keeps the parent away from market work during the leave, but can also affect the parent’s employment situation after the leave due to lack of relevant professional experience. Table 16 provides fi gures on the type of childcare system most frequently used by working mothers in some European countries. Eurostat (2007) fi nds that when no market-based childcare system is used, the main reason given by families across the European Union is that it is too expensive. This can lead low-paid employees to leave the labour market, or to accept that a large proportion of their wage will be re-channelled into childcare.⁸⁷ Note that in Finland, the price paid for childcare is linked to family income (see Box 7).

The European

86 ad hoc module of the 2005 LFS focused on conciliation between family and professional life. A report issued by Eurostat in 2007 called Reconciliation between work and family life gives very interesting insights on the availability of those different solutions across the European Union. We will refer to their main results, especially for childcare availability.

Increasing childcare opportunities is in line with one of 87

Barcelona targets. The European Council stated that “Member States should remove disincentives to female labour force participation and strive, taking into account the demand for childcare facilities and in line with national patterns of provision, to provide childcare by 2010 to at least 90% of children between 3 years old and the mandatory school age and at least 33% of children under 3 years of age”.

Table 16 Principal type of childcare used by employed mothers during hours of work

(this refers to children under 15, where at least one child is under 6 years old, in percent)

Market child Family, friend,

care system Mother Partner Neightbour

Belgium 66 3 6 25

Germany 51 6 23 20

Spain 37 22 11 30

France 46 13 11 30

Italy 35 8 20 37

United Kingdom 34 20 17 29

Total % in all 6 countries 40 15 15 30

Sources: Micheaux, S and O. Monso (2007), European LFS 2005 and ad hoc module 2005. Data are only available for the six countries presented.

Note: “Market” child care system includes both public and private provision. The column "mother" includes the case where no alternative child care is available.

It is important to recall that there are a number of possible means available to lower the fees charged for market childcare systems. These include: increasing publicly provided and fi nanced child care opportunities; subsidising private provision directly; or introducing a voucher system. Given the high costs of childcare systems together with the need for a balanced government budget, the effi cient use of resources is crucial. The voucher system supports a market-based childcare system with the benefi ts of free competition and choice, but has generally not been used in the euro area countries so far. Private efforts and investments associated with raising and educating children have positive “external” effects for society (e.g.

in the form of future tax payments). These can justify certain subsidies for families raising children. However, direct child-related transfer payments to parents may decrease incentives to participate in the labour market. The Austrian extension of the “Kindergeld” (child allowance)

scheme in 2002 is an example of such an effect ⁸⁸ and may help to explain a negative relationship between fertility and labour market participation at the individual level.

For more information, see OECD (2007a). In 2002, the Austrian 88

government extended the period of entitlement for the so-called

“Kindergeld” scheme from 18 to 30 months. The maximum duration can be extended by six months if the partner also decides to take part in the program. Men, however, rarely take the opportunity. The generosity of the scheme (it pays approximately €430 per month) and the rather low threshold for any work-related income induce most women to stay at home for quite a long time. Empirical research has shown that the Kindergeld scheme signifi cantly decreases women’s participation rates. It has also been criticised on the grounds that it is likely to lower women’s re-entry prospects in the labour market. Critics also argue that the subsidy should be in the form of childcare vouchers rather than a money transfer. Recently, the Austrian government has enacted a reform to make the Kindergeld more fl exible. Starting from 2008, parents may chose between different lengths of payment and thus trade off benefi t duration and monthly transfer payments.

Table 17 Length of parental leave and level of benefits

Country

The Netherlands 16 100

Portugal ⁴⁾ 20 5 100

Slovenia ⁵⁾ 15 37 100 15

Spain ⁶⁾ 16 (10) 100 2

Sources: Social security programmes throughout the world, 2006 and information from the national central banks. The periods of leave listed here refer to leave granted in connection with childbirth, which usually includes a period of leave prior to and after the birth of a child. Maternity leave refers to the weeks of leave from work which can only be taken by mothers. Parental leave refers to leave that can be taken by either the mother or the father of a child. Paternal leave is optional leave that can be taken by the father in order to allow both parents to be on leave at the same time - the mother on maternity or parental leave and the father on paternal leave. In general, leave systems are complex. This table attempts to summarise the key points of the systems in place in each country.

1) For 30 days, 82% of salary; thereafter, 75%.

2) Payment up to a ceiling of €28,402 plus 40% of daily earnings for annual earnings between €28,404 and €43,698, and 25% of daily earnings for annual earnings of €43,699 or more. The minimum daily benefi t is €15.20.

3) At the beginning of 2007, the so called “Elterngeld” – a subsidy to parents who leave their job to take care of a child - was introduced.

The maximum duration of 14 months requires that the leave period is shared between parents, with a minimum leave period of at least 2 months for each parent. Part-time work up to 30 hours a week is possible.

4) If the maximum leave period of 25 weeks of maternity and parental leave is opted for, the percentage of salary paid for the whole period falls to 80%.

5) The parental leave in Slovenia is known as a childcare benefi t.

6) Of the 16 weeks of parental leave, the mother must use 6; the remaining 10 can be used by either the mother or father. In 2007, paternal leave increased to 15 days.

7) 50% of salary is covered by the maternity benefi t, but mothers receive 100% of their salary while on maternity leave.

8) 13 weeks can be taken by the mother and 13 weeks by the father of a child up until the child’s 8th birthday. This is generally unpaid leave, although in certain collective agreement arrangements may be partly paid.

POLICIES AND THEIR EFFECT ON LABOUR SUPPLY 4.2.3 MATERNAL AND PARENTAL LEAVE

OPPORTUNITIES

Parental leave exists in every country of the euro area; however, benefi ts and their duration differ from one country to another (see Table 17).⁸⁹ Maternal and parental leave schemes generally tend to positively affect the labour supply of females and parents (Jaumotte, 2003). Having the right to suspend a work activity, with the option to come back to work afterwards without suffering a wage loss during the leave period, can have a positive infl uence on the decision to have a child.

Furthermore, parental leave may help redistribute the time needed for childcare more evenly between parents. However, Genre et al (2005) show that parental leave has a positive effect on employment as long as the leave period is for less than 10 months. In addition, parental leave schemes have been found to incur a cost in terms of (mainly female) career progression ⁹⁰ and to the extent that they are fi nanced by fi rms, may impose a cost on employers.⁹¹

4.2.4 PART-TIME WORK OPPORTUNITIES

Part-time work is a further policy option to conciliate family and professional lives, under certain conditions. Indeed, some evidence in the literature points to a positive impact of part-time work on employment ⁹² and Section 3.3.2 has highlighted the increase in part-time work since the early 1990s, which coincided with a strong increase in female labour supply.

At fi rst sight, working part-time seems to offer a popular opportunity to arrange family and work, since women choose to work part-time far more frequently (as can be seen in Chart 9).

However, although part-time work opportunities increase labour market participation, this does not necessarily result in higher employment when measured in average weekly (or annual) hours of work (see Section 3.3.2). As shown in Chart 9, rates of involuntary part-time work are relatively high for females.⁹³ For parents, high costs or unavailability of childcare may force workers to work part time rather than full time. Furthermore, part-time work is estimated to have a negative impact on career

progression.⁹⁴ Balancing the rights of part-time and full-time workers, allowing fl exibility for both fi rms and employees through the equal access of all working groups to part-time work and discouraging the negative stigma that can sometimes be associated with working part time in some cases should be benefi cial for all parties. Furthermore, favouring fl exible working arrangements and teleworking could provide an alternative to part-time work for reconciling family and professional life.⁹⁵

The information presented in Table 17 refers to parental leave 89

related to the birth of a new child, not leave for childcare more generally.

See Mincer & Polachek (1974), Gronau & Weiss (1981) and 90

Stoiber (1990).

Possibly introducing a bias by fi rms against the hiring of 91

women.

Genre et al. (2005) document that part-time work positively 92

and signifi cantly affects the labour supply of the young, and Pissarides et al. (2003), inter alia, emphasise the positive effects of part-time work on female labour supply.

Generally, part-time workers have been shown to suffer 93

detrimental effects of their shorter working week on career progression (see for instance International Labour Review (1997), or Tam (1997)).

See for instance International Labour Review (1997) and Tam 94

(1997).

For example, in the Netherlands, fl exible working arrangements 95

and a low rate of (involuntary) part-time work coincide.

Chart 9 Part-time workers in euro area