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Abstract

It is demonstrated that family policies are an important aspect of the institutional context of earnings inequality among coupled households. Although seldom integrated into prominent analyses of economic inequality, women’s earnings are consistently found to reduce relative inequality among households. This means that family policies, as well-known determinants of women’s employment and earnings, are important contextual determinants of economic inequality. Using Luxembourg Income Study data from 18 OECD countries in the period 1981–2008, this study demonstrates that women have higher earnings, and that their earnings reduce inequality among coupled households more in institutional contexts with generous paid leave and public childcare. We found no sizeable association between financial support policies, such as family allowances and tax benefits to families with children, and the degree to which women’s earnings contribute to inequality among coupled households. Family policy arrangements that facilitate women’s employment and earnings are associated with less economic inequality among coupled households.

Nieuwenhuis, R., Need, A. & Van der Kolk, H. (2018). Family policy as an institutional context of economic inequality. Acta Sociologica. Forthcoming, online first: http://journals.sagepub.com/doi/full/10.1177/0001699318760125

The long answer is the length of an academic paper, which I recently published together with Ariana Need and Henk van der Kolk . Of course, concerns have been raised for a longer time that long periods of (childcare) leave might be detrimental for women’s attachment to the labour force, and long leave has even been described as a ‘mechanism of exclusion’ of women from the labour market (Pettit and Hook, 2009).

Comparative research on the effects of long periods of leave, however, has been taking a variety of strategies – not all of them optimal. So, based on a literature overview and our own empirical research, we formulated four recommendations for studying the impact of long childcare leave on women’s employment:

• The relationship between duration of leave and employment of women is curvilinear: whereas long leave may reduce women’s employment, we should not overlook that short period can be beneficial (and vice versa).
• Childcare leave is expected to affect only mothers, not women without children.
• Testing the long-leave hypothesis requires the use of country-comparative data in which countries are observed repeatedly over time. Among other benefits, this reduces the sensitivity of the analyses to influential cases.
• The long-leave hypothesis is best tested against person-level data.

We conclude that our findings suggest that longer periods of leave can be detrimental to maternal employment. While short periods of leave can be useful, or even necessary, to maintain women’s attachment to the labour market after becoming a mother, very long interruptions of employment indeed seem to be a “mechanism of exclusion” (Pettit and Hook, 2009). There are, of course, alternative to long periods of leave, that include stimulating the availability of affordable and high-quality childcare, and stimulating the availability and uptake of paternity leave (Eydal et al., 2015)

References

Eydal, G.B., Gíslason, I., Rostgaard, T., Brandth, B., Duvander, A.-Z. and Johanna, L.-T. (2015), Trends in parental leave in the Nordic countries: has the forward march of gender equality halted?, Community, Work & Family, Vol. 18 No. 2, pp. 167-181, doi: 10.1080/13668803.2014.1002754.

Nieuwenhuis, R., Need, A., & Van Der Kolk, H. (2017). Is there such a thing as too long childcare leave? International Journal of Sociology and Social Policy, 37(1/2), 2–15. http://doi.org/10.1108/IJSSP-07-2015-0074

Pettit, B. and Hook, J.L. (2009), Gendered Tradeoffs. Family, Social Policy, and Economic Inequality in Twenty-One Countries, Russel Sage Foundation, New York, NY.

In this period, women’s share of household earnings grew, spouses’ earnings became more strongly and positively correlated in various countries, and inequality in women’s earnings was reduced. Inequality in household earnings increased due to the rising correlation between spouses’ earnings, but was reduced more by the decline of inequality in women’s earnings.

Had women’s earnings remained unchanged since the 1970s and 1980s, inequality in household earnings would have been higher around 2010 in all observed OECD countries. Household inequality was reduced least by trends in women’s earnings in countries with a long history of high female labor force participation, such as Finland (3% reduction) and Sweden (5%), and most in countries that observed a stronger increase in female labor-force participation in recent decades such as Spain (31%) and the Netherlands (41%).

As more countries are reaching a plateau in the growth of women’s employment and earnings, the potential for further stimulating women’s employment and earnings to counter both women’s and household inequality seems to be increasingly limited.

Nieuwenhuis, R., van der Kolk, H., & Need, A. (2017). Women’s earnings and household inequality in OECD countries, 1973–2013. Acta Sociologica, 60(1), 3–20. http://doi.org/10.1177/0001699316654528

The book, however, leaves the topic of gendered inequality largely unaddressed. Indeed, Milanovic discusses why an exclusive focus on horizontal inequality (inequality between groups, including gendered inequality) is undesirable, because it may lead to unproductive identity politics in relation to specific horizontal inequalities, and because it does not address the root cause of inequality. Yet, while relevant, these arguments do not convince that a greater emphasis on gendered inequalities would not have been informative regarding the measurement and explanations of global inequality. Below, I list three reasons why including a focus on gender can improve our understanding of trends in global inequality.

First, the analyses presented in ‘Global Inequality’ seem to implicitly assume that all income is shared equally within the household. Indeed, incomes are equivalised to account for differences in household size and composition, but then it is assumed that there is no inequality within households in the degree to which women and men have equal access to, and control over, how to spend the household income. Admittedly, there is not so much empirical research that does account for such differences (Cantillon, 2013), but a literature on this topics seems to be emerging and indicating that women typically have less access to, and control over, household income (Bennett, 2013). Not accounting for this likely leads to understating levels of global inequality among individuals.

Secondly, the level of economic inequality between women and men is intrinsically linked to levels of inequality among households (Lam, 1997). Milanovic discussed how homogamy drives up inequality among households. This is true indeed, but the resulting correlation between partners’ earnings is typically quite low. In a recently published study, Nieuwenhuis Need, and Van der Kolk (2017), focusing on OECD countries from 1973 to 2013, showed how women’s rising earnings were indeed associated with a somewhat higher correlation between spouses’ incomes. But the same trend was also associated with a substantial decrease in inequality among women (living in coupled houseohlds). So, while inequality in household income increased due to the rising correlation between spouses’ income, it was reduced more by the decline of inequality in women’s incomes. Thus, the net effect has been that women’s rising incomes were a driving force reducing inequality among households – at least in rich democracies in recent decades.

Thirdly, levels of gender (in)equality vary substantially across countries and over time – even when just limiting our focus to economic inequality. Trends towards gender equality have been observed to stagnate in various countries (including the Nordic countries, where women’s employment rates have been comparatively high for a long period already) or even reverse like in the United States (Boushey, 2008). If inequality is rising in these countries, as shown by Milanovic, this could be related to stagnating gender inequality. At the same time, in other countries there is much more potential for further reducing household inequality by means of promoting gender equality. Furthermore, women’s (rising) incomes have contributed substantially to countries’ average income levels. On the one hand this means that countries in which trends towards gender equality are stagnating may see less growth in average income levels. On the other hand, it means that countries with high levels of gender inequality (in terms of economic participation) have the opportunity to foster growth in average incomes by stimulating women’s (equal) participation on the labour market. To the extent that these countries are poorer, such as China and India, promoting economic gender equality will thus also help these countries to catch up with the average income levels in richer countries – thus reducing global inequality.

Whether and to what extent trends in gender equality will affect future trends in global inequality remains an empirical question. But, together these arguments demonstrate that gender (in)equality is a driving force of inequality both within nations and between nations. Now, these points of critique are easily reaised, but very difficult to empirically substantiate (or refute). I don’t think Milanovic has the data to do so, and neither do I have them. In fact, I don’t think such data exists for a substantially long period of time. Yet, I think these comments are important to keep in mind when interpreting the evidence on long-term trends in global inequality, and when thinking about questions that beg answering in future research.

References

Bennett, F. (2013). Researching Within-Household Distribution: Overview, Developments, Debates, and Methodological Challenges. Journal of Marriage and Family, 75(3), 582–597. http://doi.org/10.1111/jomf.12020

Boushey, H. (2008). “Opting out?” The effect of children on women's employment in the United States. Feminist Economics, 14(1), 1–36. http://doi.org/10.1080/13545700701716672

Cantillon, S. (2013). Measuring differences in living standards within households. Journal of Marriage and Family, 75, 598 – 610. (online)

Lam D (1997) Demographic variables and income inequality. In: Rosenzweig M and Stark O (eds) Handbook of Population and Family Economics. Amsterdam; New York: Elsevier, pp.1015–1059.

Milanovic, B. (2016). Global inequality: A new approach for the age of globalization. Harvard University Press. (Publisher’s website)

Nieuwenhuis, R., van der Kolk, H., & Need, A. (2017). Women's earnings and household inequality in OECD countries, 1973–2013. Acta Sociologica, 60(1), 3–20. http://doi.org/10.1177/0001699316654528

• carries out policy-relevant analysis and research on the current socio-economic situation in the EU on the basis of the most recent available data
• examines major issues which are features of the situation or affect it with the aim of providing evidence on which to base policy-making across the EU.

It will be interesting to see what kind of questions and comments the paper attracts at this stage, which is much more policy-oriented compared to last week’s academic seminar. For those who missed it, the abstract of our paper reads:

Although employment growth is propagated as being crucial to reduce poverty across OECD countries, the actual impact of employment growth on poverty rates is still unclear. [Results show that] the increase in women’s employment has had a significant impact on poverty trends. […] However, in the Nordic countries no such poverty reducing effect was found, as in these countries womens employment rates were very high and stable throughout the observation period. In countries that initially showed marked increases in women’s employment, such as the Netherlands, Germany, Spain, Canada, and the United States, the initial increases in women’s employment rates were typically followed by a period in which these trends levelled off.

Hence, our findings suggest that the potential of following an employment strategy to reduce poverty in OECD countries has, to a large extent, been depleted.

The paper is available here and isjoint work with Wim van Lancker, Diego Collado and Bea Cantillon. The program of the seminar is available online.

The title of my talk will be “Has the potential for compensating poverty by women’s employment growth been depleted?”, which is based on joint work with Wim van Lancker, Diego Collado, and Bea Cantillon. It answers the question whether trends in women’s employment in recent decades have affected trends in household poverty in OECD countries. We find that women’s employment growth is negatively associated with poverty but perhaps not strongly enough to make further employment growth into an instrument against poverty. Policy implications are discussed.

A list of previous seminars is available online.

References

Nieuwenhuis, R., Van Lancker, W., Collado, D., & Cantillon, B. (2016). Has the potential for compensating poverty by women’s employment growth been depleted? LIS Working Paper Series #644. Available Online

If you happen to be in New York and are interested in attending this talk, please contact me. There might be some ‘tickets’ available.

From the announcement:

Women’s employment rates have risen markedly across OECD countries in recent decades, although evidence is mounting that this trend is stagnating. Rense Nieuwenhuis will discuss how these trends have affected earnings inequality within and among coupled households, as well as poverty rates. His research is based on LIS data to cover OECD countries for about 3 decades. In his talk, he will also relate his findings to current policy developments in Europe.

Rense is a sociologist interested in how the interplay between social policies and demographic trends gives rise to economic inequalities. His publications appeared in the Journal of Marriage and Family and the European Sociological Review, among other journals. In 2014 he obtained a Phd (‘Cum Laude’) from the University of Twente in the Netherlands, and currently he is an assistant professor at the Swedish Institute for Social Research (SOFI).

Light refreshments will be provided. After the talk, all are welcome to join us for a social gathering at Bryant Park. 

In my note, titled Association, Aggregation, and Paradoxes: On the Positive Correlation Between Fertility and Women’s Employment, I respond to a recent article by Brehm and Engelhardt. Their article revisits the cross-country correlation between total fertility rates (TFR) and female labour force participation rates (FLFP). The interesting thing about this correlation is that it turned from from negative to positive after 1985. My disagreement with their (otherwise excellent) article is that the pre-1985 negative correlation is taken as support for the hypothesis that for women having young children and being employed are (partially) incompatible, implying that the correlation turning positive contradicts that hypothesis regarding the later period.

My note provides three comments on why this cross-country correlation is not informative to critically test hypotheses on the degree to which women combine motherhood and employment:

1. The macro-level correlation across countries turned positive due to decreasing fertility in southern European countries, but this was hardly associated with more female labour force participation. This is not in line with the notion that within countries higher fertility was associated with more employment.
2. There is a whole literature on aggregation paradoxes, that dictate that correlations on different levels of aggregation can have opposite signs. So, a positive correlation at the aggregate country-level is not informative regarding a correlation at the individual level
3. In my own study in Journal of Marriage and Family I used individual-level data to find that mothers were still (substantially) less likely to be employed than women without children. Moreover, in various countries the individual-level association between motherhood and employment did not change at all in the period that the country-level correlation turned positive.

The original article by Brehm & Engelhardt and my response are available online from the Demographic Research website. Those who follow my research will recognise some arguments that were developed in my dissertation (Family Policy Outcomes).

On a final note, the editorial team of Demographic Research has been incredibly efficient in processing this note, and seem very committed to facilitate academic debate in their journal. The whole process (from submitting to publishing) took just a couple of days, and given that the original paper was published only a week ago, this makes for a timely discussion.

1. Motherhood is still associated with lower employment rates among women.
2. Family policies matter: paid leave facilitates the employment of mothers, but family allowances stimulate the traditional breadwinner model.
3. Work-Family reconciliation policies are most important to stimulate the employment of women with traditional gender role attitudes.
4. Women’s Employment matters: Their earnings reduce income inequality among coupled households
5. Women’s Employment matters: Their earnings reduce single mother poverty