All OECD governments aim to support families and to give parents more choice in their work and family decisions. Countries differ considerably, however, in the types and intensity of support provided. These differences are rooted in countries’ histories, their attitudes towards families, the role of government and the relative weight given to the various underlying family policy objectives, such as: reconciling work and family responsibilities, helping parents to have the number of children they desire, mobilising female labour supply, promoting gender equality, combating child and family poverty, promoting child development and generally enhancing child well-being from an early age.
Families are changing
Families have changed over the past thirty years. This chapter provides an overview of the changes in family formation, household structure, work-life balance, and child well-being. Fertility rates have been persistently low in many OECD countries leading to smaller families. With marriage rates down and divorce rates up, there are an increasing number of children growing up in sole-parent or reconstituted families. Sole-parent families are of particular concern due to the high incidence of poverty among such households. Poverty risks are highest in jobless families and lowest amongst dual-earner families. Important gains in female educational attainment and investment in more family-friendly policies have contributed to a rise in female and maternal employment, but long-standing differences in gender outcomes in the labour market still persist. The increased labour market participation of mothers has had only a limited effect on the relative child poverty rate as households without children have made even larger income gains. Child well-being indicators have moved in different directions: average family incomes have risen but child poverty rates are also up. More youngsters are now in employment or education than before, while evidence on health outcomes is mixed. Overall, are families doing better? Some undoubtedly are, but many others face serious constraints when trying to reconcile work and family aspirations.
The balance of family policy tools – benefit packages, spending by age and families with young children
Across OECD countries, public spending on family benefits makes up, on average, one-tenth of total net public social spending. Since the mid-1990s, there has been a trend increase in spending on in-kind benefits (in particular childcare services), while spending on cash transfers has been relatively stable, even though it remains the most important of the family benefits. Before the age of three, and more often immediately following birth, poverty risks for families with young children are at their highest. In around two-thirds of OECD countries, some families can expect to experience either deep or persistent (two or more consecutive years) poverty if one parent stops working. A review of age-related spending on children also reveals that in many countries spending on education is prioritised, and often families with older children benefit most. Family policies were scaled up during the early crisis period as part of the stimulus packages but, with countries now moving into fiscal consolidation, resources for family policies are also being affected.
Total fertility rates have declined steadily in most OECD countries since the late 1960s. However, since the late 1990s there has been a fertility rebound in a large number of countries. Is this a temporary phenomenon, or a significant change in trend? To try and answer the question, it is important to establish the main drivers of fertility trends and how they have evolved recently. This chapter first reviews the mechanics involved: the postponement of family formation, smaller family sizes and the choice to remain childless. It then looks at the factors which may affect fertility decisions, including the direct cost of children (education and housing), and the indirect cost of foregone labour market opportunities. These vary with education and skill levels. The effects of fluctuations in economic growth are also considered. The chapter concludes with a discussion of the most promising policy initiatives to narrow the fertility gap.
Reducing barriers to parental employment
This chapter provides an overview of how the design of parental leave policy, childcare policy, flexible workplace practices, national tax/benefit systems and financial incentive structures may affect the parental decision to engage in paid work. If paid parental leave is too short, mothers may not be ready to return to work and instead drop out of the labour force. At the same time, if paid leave is too long, skills may deteriorate and an extended absence from paid work can make the return to work difficult. Using data on parental leave reform, this chapter considers the overall effects of 40 years of changes in parental leave on female labour supply. The chapter also looks at how policy uses parental leave arrangements to promote more gender equity in leave taking. Childcare constraints play an important role in parents’ work decisions. Crossnational variations in childcare participation of 0-2 year-olds tend to be related to the degree of public financing of childcare. The price of childcare also plays an important role, and in some countries it does not pay to work once childcare costs are considered. This chapter also includes an overview of flexible workplace practices, such as measures to facilitate nursing, flexible working times, time-saving opportunities and statutory entitlements to change working hours.
Promoting child development and child well-being
Despite increases in average family incomes, child poverty has edged up over the past three decades. Today, more than one in ten OECD children lives in poverty. Beyond poverty, infant mortality rates are falling and the proportion of children born weighing less than 2.5 kilograms is on the rise. Moreover, inequalities in health, education and material well-being raise concerns about children being left behind in a number of OECD countries. More mothers with young children are in paid work than in the past. There is a longrunning debate on possible negative effects of maternal employment on child development. For the first time, this chapter presents results from panel data studies on child outcomes in different OECD countries to help answer the question: what is a good moment for mothers to go back to paid work? The evidence suggests that a return to paid work by mothers within six months after childbirth may have negative effects on child outcomes, but the effects are small and, in certain circumstances, balanced by positive effects related to earning extra family income. The evidence in the literature on the effects of parental leave policies on child well-being is mixed, and the cross-national analysis in this chapter finds no evidence of significant positive or negative effects of parental leave reform on child well-being either.
Sole parents, public policy, employment and poverty
Sole-parent families across the OECD are changing. There are more employed soleparent families than before, their families are smaller than they were a generation ago, and their children on average are older. Nonetheless, poverty risks remain higher for this family type than for other households with children. Policies specifically targeted at sole parents can help, but outcomes in terms of economic participation and poverty depend on whether countries treat sole parents like any other parent and provide commensurate support to help them match their work and care commitments. Such a general and "active" policy stance is effective in reducing benefit dependency, even when financial incentives to work for low-income sole parents may be weak. A considerable proportion of OECD children is eligible for child-support payments. Child-support policies can play an important role in improving the well-being of sole-parent families and in some countries they significantly reduce poverty risks for children in such families.
Child maltreatment has received less attention than other aspects of child well-being in international comparisons. The limited international comparable evidence nevertheless suggests it concerns a small but significant minority of children, and that child maltreatment causes considerable social and emotional damage, as well as economic costs to individuals and to society as a whole. This chapter takes stock of what is known about the economic determinants and consequences of child maltreatment across the OECD. It considers the relationship between maltreatment and other important social outcomes and, insofar as information is available, it compares and contrasts policy stances and programmatic interventions.
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