Compensating Unpaid Care
Limited access to paid work increases the likelihood that women will be in poverty. Low earnings make it difficult for women to save and contribute to state and private pensions, meaning they are also more likely than men to be poor in old age. Moreover, women are also more likely to live longer than men, which contributes to a higher risk of poverty in old age. Pension systems have generally been designed around the assumption that men are the primary earners and women are the primary carers. Men’s pension income is, therefore, expected to cover their wives too. This assumes that men will share their pension income equally with their wives, which is not necessarily the case in reality. Also, pension systems do not actually address the income inequalities women face due to caring responsibilities and, thus, perpetuate this inequality.
There has been a global move towards more individualised pension systems in recent years with increased emphasis on pension income entitlement linked to individual earnings. In theory, this gives more incentive for women to build up their own individual pensions. However, in practice, these pension systems need to be understood in the context of women’s reduced access to paid work due to caring responsibilities. Therefore, the extent to which women are able to build up their own pensions due to broken work histories, lower wages and lengthy leaves needs to be acknowledged. This has resulted in pension ages being pushed back to allow women to work longer, but also to some consideration of how to compensate for caring responsibilities during working life to enable higher pensions in old age.
One potential way to do this is to subsidise a parent to stay at home with children — potentially over 2 or 3 years — and essentially give support to caregivers. However, these kinds of leaves are not generally successful in combating poverty. Because care is undervalued, they usually attract a low flat rate or percentage of the average wage, with weak employment protection, and usually mean mothers with low-middle incomes and low education are out of paid work for long periods. They often lead to limited re-entry into paid work, and those who do return, do so in low-paid part-time work, exacerbating the motherhood penalty and reinforcing gender divisions of labour.
Other schemes include allowing time spent caring to count towards pension entitlement. This might be by enabling pension entitlements when becoming a mother or when taking parental leave. It might be by reducing the number of years required to build a pension for those with caring responsibilities or by counting years spent caring in the same way as paid work. However, compensating for time spent caring does not overcome the fact that pensions are linked to earnings. Thus, the main way to tackle this issue is to support those with caring responsibilities to access paid work and earn an independent income.
Supporting Mothers into Paid Work: New Solutions, New Challenges
Countries can reduce the impact of caring by supporting mothers into paid work via a mixture of activation policies, protected leaves and financial incentives for second earners to take up employment through available, affordable and quality childcare.
Protected leave that enables a break from work when a child is very young whilst protecting the mother’s job allows for entry and re-entry into paid work regardless of caring responsibilities. However, unlike the care leaves described above, to be successful, these leaves need to be well-paid, with a high wage<span class="span"><span id=hint class="box-source">replacement rate</span><div class="popover">Source:<br><br><div>Finch, N. Inclusive citizenship and degenderization: A comparison of state support in 22 European countries. Social Policy & Administration, 2021.</div></div></span>(the amount paid during the leave to replace the mother’s lost earnings whilst on leave). For example, the replacement rate is 100% of average earnings in Austria, Estonia, Germany, Luxembourg, Netherlands, Poland, Portugal and Slovenia, but Ireland and the UK only compensate for about a third of the average wage. Leaves also need to be relatively short to ensure that a break from paid work does not mean long periods out of paid work exacerbating the motherhood penalty. Moreover, the leave needs to be followed by quality childcare support that is free and guarantees a full-time childcare place for all pre-schoolers to realistically enable mothers to return to work.
Research<span class="span"><span id=hint class="box-source">shows</span><div class="popover">Source:<br><br><div>Center for Progressive Policy. Women in the labour market: Boosting mothers’ employment and earnings through accessible childcare. 2021.</div></div></span>that women enjoy better living conditions in countries that invest more money in childcare. These countries have more women in paid work and smaller pay gaps between genders. The Nordic countries are leaders in that regard. However, it's not enough to simply have childcare available — it also needs to be affordable. If childcare is too expensive, the financial benefits of women entering the workforce are reduced. This is particularly true for those with a lower level of education, who tend to earn lower wages. Mothers may also be uncertain about the quality of external childcare. This may influence their decision to pursue paid work. Where childcare is expensive and of low quality, informal care arrangements are more common. It most often involves grandparents caring for their grandchildren. To support mothers in taking up paid work, welfare states need to provide childcare guarantees. Such guarantees include the availability of free, full-day care for children of pre-school age, as well as after-school care for school-aged children.
However, childcare is not enough in itself to enable mothers to sustain paid work and to reduce gender inequalities in the labour market. Mothers in paid work often experience a<span class="span"><span id=hint class="box-source">‘double shift’</span><div class="popover">Source:<br><br><div>Hochschild, A. R. The Second Shift: Working Parents and the Revolution at Home. Viking, 1989.</div></div></span>given the gender division of care within the household leading to time poverty, with little time for leisure relative to men and potentially low well-being. Childcare and leaves aimed solely at mothers, therefore, fail to fully tackle the underlying gender division of labour. This means that women reduce their working hours, drop out of paid work entirely or reduce their fertility to compensate for this double burden. In countries where women are not offered the opportunity to reconcile work and family life, they<span class="span"><span id=hint class="box-source">often opt</span><div class="popover">Source:<br><br><div>Doepke, M. et al. The Economics of Fertility: A New Era. Social Science Research Network, 2022.</div></div></span>for lower fertility.
Unless gender inequities in care within the household are addressed, the assumption that women are the main carers will remain. This, in turn, not only means women will continue to be less likely to take up paid work, but also less likely to take up well-paid jobs. To fully incorporate women into paid work would require gender equality in caring — supporting fathers to care — as well as supporting mothers to enter paid work. This requires changes in society at a deep structural and cultural level, relating to social norms and behaviours.
Supporting Fathers in Childcare
Countries can support fathers to undertake childcare by offering paid leave from work with the specific purpose of looking after their children. Leaves aimed solely at mothers, especially if they are long, will have limited success in challenging gender role norms. But leaves for fathers need to be designed in such a way that they will not only encourage fathers to care, but to do so to the same extent as mothers. Leaves which do not do this will be less successful at challenging the assumption that mothers are the main carers and, in turn, at supporting mothers into paid work.
For example, some countries, such as the UK, have implemented maternity leave that allows a portion of the leave to be shared with fathers, but leaves it up to the family to decide whether the father takes any leave, and if so, how much. Nevertheless, this type of 'transferable leave' is unlikely to be successful in challenging traditional gender roles as it is unlikely that fathers will actually take the leave. This is partly for financial reasons. First, the gender pay gap means fathers are likely to earn more than mothers. It, therefore, becomes more financially advantageous for the mother to take the time off work to care for her children. This is particularly true in cases where the financial benefits attached to the leave do not fully compensate for the loss of earnings. Second, social norms and the persistence of the male ‘breadwinner model’ often discourage fathers from taking extended leave. As a result, these policies, when in place, are still not effective enough to tackle assumed gender roles. Paternity leaves or ‘use it or lose it’ leaves aimed at fathers — whereby fathers are allocated some months or weeks of leave which the family will lose if they do not use it — are more likely to encourage take up.
The USA and New Zealand are the only countries that do not offer any individual paternity leave. Others such as Australia, Chile, Hungary, Turkey, Mexico, Malta and Croatia offer only one week or less, and nine others offer two weeks or less. Belgium, France, Iceland, Japan, Korea, Portugal and Slovakia offer individual leaves of 20 weeks or more. Still, not all of these offer 100% of previous earnings for the whole leave, with Japan<span class="span"><span id=hint class="box-source">leading</span><div class="popover">Source:<br><br><div>Organisation for Economic Co-operation and Development. Family Database: Parental leave systems.</div></div></span>in the number of weeks where previous earnings are fully paid offered to fathers (31.9 weeks) followed by Korea (25.2 weeks), Slovakia (21 weeks) and Luxembourg (19.4 weeks).
Nevertheless, these more generous paternity leaves are still unlikely to tackle gender inequalities surrounding care if mothers are allocated much longer leaves than fathers. To bridge the gap, some suggest the introduction of equality in the length of maternal and paternal leave. Therefore, arguably, individual leave rights for mothers and fathers of similar lengths would be a more concrete step to<span class="span"><span id=hint class="box-source">tackle</span><div class="popover">Source:<br><br><div>Finch, N. Inclusive citizenship and degenderization: A comparison of state support in 22 European countries. Social Policy & Administration, 2021.</div></div></span>the gender division of labour in the household.
Both leaves for mothers and fathers would need to be well, and equally, compensated financially to reduce gender poverty. This would then encourage fathers and mothers to care on an equal basis and, thus, access paid work on an equal basis. This would, in turn, contribute to reducing poverty in families with children, not only by increasing female financial independence through the support of maternal attachment to paid work, but also by giving fathers the opportunity to provide care. This would also highlight the value of care, and challenge the gender role norms within the home and in paid work. Women would be less likely to lose out financially relative to men as both would be earning and caring equally. Ultimately, gender gaps in poverty (i.e., when women are more likely to be in poverty than men) in working and old age would be reduced.