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Do child care, paid leave reduce gender inequality? Study of Austria raises doubts

Women are often disadvantaged in the work place and family policies try to ease that. Do they work?

Gender gaps in employment and pay in Austria’s labor force have shrunk considerably in the last half-century. But new research suggests subsidized day care and paid parental leave — family policies receiving bipartisan support in the United States to tackle gender inequality at work — aren’t responsible for those improvements long term.

Over time, the policies neither harmed nor helped gender equity at work in Austria, according to findings by an international team of researchers just published in a National Bureau of Economic Research working paper. While they agree many American families really need help, the study has U.S. experts pondering whether those particular policies are the best approach, especially in terms of closing work-related gender gaps.

The researchers found a “limited role for public policy” in explaining long-term decline in gender inequality and said the pattern of Austria’s family subsidies expansion has been similar to that in other European countries and is a path America appears to be on.

Instead of finding big gains for women in the labor force, they said Austria’s parental leave policies have had “relatively small and inconsequential” negative short-term effects and no long-term effects. Even more surprising, the country’s publicly provided and heavily subsidized child care wasn’t a factor in the long-term decline in gender inequality, said the team, led by Princeton University economist Henrik Kleven.

The new research should give U.S. policymakers pause, said economist Lyman Stone, an adjunct fellow at the American Enterprise Institute and a research family at the Institute for Family Studies. He called the study “one of the most extensive to date on the effect of large expansions of child care programs and parental leave programs.

“Even strenuous efforts far greater than those proposed in the United States have virtually no impact on the targeted goals. We should therefore not waste political effort pursuing those policies, but should focus on policies which are both fairer to all families and more effective at addressing serious inequalities, such as an expanded child tax credit or a child allowance,” he said.

Other experts disagree. The researchers noted that studies in other countries with strong family leave/child care policies tend to show less pay inequality between men and women.

“One thing to think about is why there is an overall correlation between these policies and gender equality and not a within-country correlation — at least in this case,” said Arielle Kuperberg, associate professor of sociology and women’s, gender and sexuality studies at the University of North Carolina Greensboro. “It could be that rather than the policies causing equality, the policies are a reflection of greater societal ideals and priorities — so countries that prioritize greater gender equality pass these policies and also do other things that lead to greater equality,” said Kuperberg.

Roberta Rehner Iversen, University of Pennsylvania associate professor and faculty associate at the Institute for Urban Research, expressed surprise at the findings. “I’d say the best examples of gender-equal family policies come from the Nordic countries.”

Generous policies

The researchers looked at Austria’s policies from 1953 to 2017. Parental leave was first introduced there in 1961 and has grown and shrunk and grown again since. Maternal leave matched unemployment insurance benefits.

Austrian parents can now take up to 35 months of paid parental leave if the time is shared and up to about 28 months if one parent uses it. But since job protection ends at 24 months, the study said most women who returned to work did so within two years.

The generous length of leave may work against its promoting gender equality long term, said Kuperberg, who also edits the Council on Contemporary Families blog, The Society Pages. “They are not doing the work that will get them promotions and higher pay.” Instead, they return to their same jobs and salaries “and advance from there, but miss out on three years of raises.”

Austria’s experience doesn’t mean that a paid leave policy would not lead to better outcomes for gender equality here in the States, said Kuperberg, who thinks the trick is finding the “sweet spot” that encourages long-term gender equality. “I think that is a lot more than zero months of paid leave, but probably less than two to three years per child,” she noted.

Nursery care in Austria enrolls children ages 1 and 2, while preschool care is for ages 3 to 5. One-fourth of eligible children are in the nursery care and roughly 90% of kids who can be in preschool are. Municipalities provide the child care and out-of-pocket costs are “among the lowest in the developed nations,” the report said. The private market for child care is “very limited.”

Similar to the United States and the United Kingdom, among others, Austria’s raw gender gap in earnings is about 40%, making overall 60 cents on the dollar compared to men.

Apples to apples?

How comparable, though, are America and Austria when it comes to issues that might be impacted by family workplace policies?

“I don’t know that we really can compare,” said Kuperberg. “Although we can say we have a lot of people in the U.S. who have very traditional ideas about gender, the U.S. in general is very career focused and has a culture of overwork more than most European countries.

“We also don’t have things like universal paid health care which is not tied to our job — so it may be easier for Austrian companies to cover the costs of paid leave because they are not also covering the cost of health care benefits for employees over that time,” said Kuperberg, who noted that comparisons of countries and their policies should consider such variables.

Workplace leave policies in the United States and Austria aren’t comparable in terms of length or who can access them. In the United States, leave is typically 3 months unpaid, though some companies offer paid leave of different durations, seldom exceeding three months for new moms. Many American women have no access to paid maternity leave, cobbling it together with paid sick and vacation time — if they have that.

Among other differences noted in the study, Austria is very traditional when it comes to women staying home to raise children, so fewer women work for pay outside the home: 55% vs. 75% in the United States. They may also be less apt to return to work after having children, even with free child care.

Because American women have greater attachment to the workforce, child care help in the U.S. likely is more needed for families that can’t afford to purchase the care themselves. Often, lower-income parents must juggle schedules to provide care, seek family help or one parent leaves the labor force, at least temporarily.

American policy choices

“One big hindrance to gender equality in the workplace is that the U.S. does NOT have a ‘family policy!’ We have policies that are based on family composition, but none, for example, that help the current inequities in who is working at home and also taking care of the children’s remote learning!!” said Rehner Iversen told the Deseret News in an email.

She wrote that it’s even worse since the pandemic began. “Unemployment among women with children is significantly higher than before the COVID-19 pandemic and many are expected to not be rehired!”

Pay equality for women is far from the only measure of value for family policies in the workplace, Kuperberg said. She listed three other concerns as examples of important considerations when it comes to work-related policy: what provides the greatest resources for kids, the impact on health and lower postpartum death rates of women “because they are going back to work too quickly after giving birth because they can’t afford time off.” she said.

Paid leave and subsidized child care in America have received some bipartisan support.

During the Trump administration, federal employees began receiving paid parental leave. Policies promoted by President-elect Joe Biden during his campaign included expansion of policies deemed family-friendly and worker-friendly, including paid leave for new parents when a child is born, adopted or fostered and boosting both affordable child care and subsidies to pay for it. Ivanka Trump, who has been one of her father’s advisers, has been a strong advocate of both family policies.

Congress is also considering several parental leave proposals. They vary in how much time they would provide and how they’d be funded.

Stone is among critics who hope findings in Austria will lead policymakers to reconsider which programs they want to support as they try to help woking families.

“The results are quite compellingly demonstrated: The authors find that large expansions in child care programs do not reduce gender inequality virtually at all. They do virtually nothing to close the gender gap in earnings,” Stone said. “The same is true of maternity leave programs. These programs also appear to have very little effect on births.”

Stone said the study of Austria’s experience “adds to the large body of existing research finding that the effects of these programs as conceptualized by their generally highly-educated, progressive boosters are vastly overstated. The reality is that child care programs provide massive subsidies to people with the least need, privileging the already privileged.”

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