Research Findings

Earnings inequality matters for understanding how family policies affect mothers’ employment

June 11, 2020

Many rich countries provide paid parental leave and childcare to help mothers reconcile work and parenting. But, where are these policies most effective at keeping moms employed, and which moms respond most strongly to them? Not surprisingly, the answers to these questions are complex and contentious. 

In a recent study, we propose that a missing piece of the puzzle is a country’s level of earnings inequality, the size of the gap between those who earn a little and a lot. Earnings inequality helps explain who is most affected by family policies and why these same policies “work” in some countries, but not others. 

We found that when countries spend more on early childhood education and care (ECEC), mothers of young children are more likely to be employed. The effect is stronger for mothers without a college degree than for mothers who have completed college.

But context matters. When we examine the type of country a mother lives in the results change.  In more equal countries, like Sweden, we find no educational gap in the effect of ECEC spending on mothers’ employment. 

The educational gap only exists in more unequal countries, like the United States.  Once we consider earnings inequality, we see that ECEC provides the biggest boost to employment for mothers without a college degree in more unequal countries.  That is, to moms with the lowest relative earnings.

These findings help explain why past studies do not always agree on the effect of ECEC spending on mothers’ employment, or whether there is even an educational gap at all.

These findings support the idea that mothers with the least to gain financially from employment are the most enticed by family policies that make employment easier for them.  Earnings inequality also creates greater economic pressure on lower-educated moms to be employed.

Our findings also support the argument that mothers with college degrees, especially in more unequal countries where their earnings are relatively high, find ways to be employed regardless of how governments support childcare, such as purchasing private childcare.

The length of paid parental leave also matters. Short leave (up to six months) generally boosts mothers’ employment, but longer leaves – which are up to three years in some countries like Hungary – can discourage moms from being employed.  We found this to be true, especially for moms with a college degree.

These findings support the argument that longer-duration parental leaves may be particularly damaging to gender equality in the labor market for mothers with higher levels of education, who are likely to compete with men and childless women for the “best” jobs.

But again, this depends on the type of country in which a mother lives. The negative effect of long leave is strongest in more unequal countries.

This finding was inconsistent with our hypotheses and we were unable to explain it with any mechanisms we could measure, such as mothers having fewer employment protections or being less likely to work in the public sector. We speculate that employers may be more likely to have, or be able to act on, discriminatory preferences in countries with higher levels of earnings inequality.

Our motivation for exploring the role of earnings inequality stemmed from previous explanations about why women work for pay and which women choose to do so. We drew on these explanations to develop competing hypotheses about the relationships between national family policies, national levels of earnings inequality, and mothers’ employment for mothers with and without a college degree.

To test our hypotheses, we combined employment data on 1.2 million mothers of young children living in 23 countries over a 17 year period (1999 to 2016) with data we collected on each country’s changing family policies, earnings inequality, labor market conditions, and attitudes about mothers’ employment.

We conclude that earnings inequality matters. Earnings inequality helps explain both whom family policy helps (or hurts) and where these interventions are most effective.

Read More

Jennifer L. Hook and Eunjeong Paek. “National Family Policies and Mothers’ Employment: How Earnings Inequality Shapes Policy Effects across and within Countries” in American Sociological Review 2020.

Image: Kids Work Chicago Daycare via Flickr (CC BY 2.0)

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