Work-family policies and the effects of children on women's employment hours and wages

Welfare state generosity around work-family policies appears to have somewhat contradictory effects, at least for some measures of gender equality. Work-family policies, in encouraging higher levels of women's labor market participation, may have also contributed to lower wage-levels for women relative to men, for instance. We consider the relationship between particular work-family policies and mothers’ employment outcomes. Analyses use data on employed women aged 25–45 from the Luxembourg Income Study for 21 countries across Eastern and Western Europe, North America, Israel, and Australia. We estimate within each country differences in employment hours and wages for women based on their number of children. Then, we examine the association of estimated per child penalties in wage and employment hours with country-level data on leaves and childcare. Work-family policies are generally associated with positive employment outcomes for mothers, relative to childless women. Work-facilitating policies such as childcare for young children have decisively positive effects on mothers’ employment hours and wages. Work-reducing policies, such as parental leave, however, can have positive effects if the leaves are moderate in length, but tradeoffs if the leaves are long.