ISER Working Paper Series 2006-55
The impact of institutions on motherhood and work
14 Nov 2006
Over the last decades women participation rates have increased remarkably in the European Union countries, while fertility declined in most advanced countries and is now below the replacement rate. These phenomena carry some positive and negative implications for the ability of countries and the European Union itself to meet a variety of social and economic targets. On one hand, the increased number of workers helps to pay pension obligations to current retired, while on the other the declining population levels make it less likely that the current form of European pension systems can be sustained. The employment goals established by the European Union - the so-called Lisbon target - of 60% of women participation to the labour market, imply the design and implementation of social policies especially in Southern Europe, which necessitates an increase in female employment rates of nearly twenty percentage points. How to pursue the implementation of policies designed to raise women's employment rates without diminishing fertility rates? An understanding of this relationship, in different contexts, has encouraged researchers to consider fertility and labour market participation as a joint decision, which depend not only on prices and income but also on the institutional environment.
In this paper we selected seven of the fifteen countries of the dataset, representative of the different geographical areas of Europe: Italy and Spain (Southern European countries), France, Belgium and the Netherlands (Central West-European countries), Denmark (a Northern European country) and the U.K. (a Northern European country, characterised by a more liberal welfare regime).
Our results show availability of part-time jobs has a positive effect on women's work decisions in South Europe. While in the countries where part-time is widespread, it often reflect low-qualified/poorly paid job and mostly temporary positions, in countries where is very limited, is characterized by similar job protection and social benefits as full-time jobs and it consists mainly of permanent positions and middle-level job qualifications. Childcare availability positively affects the probability of working (indicating potential availability of other social services), while it is not significant in the fertility equation. The generosity the optional parental leave has a positive effect on the probability of having a child, but a negative effect on the probability of working. This can be related to the demand-side effect: employers are less willing to hire a woman if they know that they have the opportunity to stay at home for long period after childbirth. Moreover, a longer leave may negatively affect woman's human capital accumulation, making more difficult and less likely to re-enter the labour market after the break.