Is There Really a Trade-Off? Parental Leave, Flex Work, and Women’s Employment Rates

By Melissa J. Anderson (New York City)

In the 1990s, the US had one of the highest rates of working women in the world. Ranked 6th in the OECD for female labor force participation, 74 percent of women in the US had a job. That percentage was much higher compared to the rest of the OECD countries, where an average rate of 67.1 percent of women were in the workforce.

Today, though, is a different story. By 2010, the US’s female labor force participation rank fell to 17th out of 22. What happened?

In the US, the answer is: “not much.” The labor force participation rate in 2010 barely budged, increasing just a little over one percentage point to 75.2 percent. On the other hand, things changed rapidly in the rest of the OECD countries. Women’s workforce participation rose rapidly to 79.5 percent, due to generous parental leave and flexibility policies.

So, is that the answer? The US just needs to legislate more family friendly workplace policies, and get back on the side of progress? Well, maybe. But, according to a National Bureau of Economic Research study [PDF] by Francine D. Blau and Lawrence M. Kahn, it’s not quite so simple. They write, “Our analysis of women’s labor force participation and family-friendly policies suggests that there may be a tradeoff between some policies that make it easier for women to combine work and family and women’s advancement at work.”

There may be trade-offs, but the facts are even more complex than this research shows. Here’s why.

The Research

The past two decades have seen much of the OECD overtake the US in female labor force participation – that is, the percentage of women working outside the home. In 1990, the US was near the top of the list, ranked number six out of 22. Today, the US has fallen to 17 – but not because women are leaving the workforce. In fact, the percentage of women working remained fairly stable, rising from 74 percent in 1990 to 75.2 percent in 2010.

The real change has taken place in other OECD countries, where the average rate of working women has risen from 67.1 percent to 79.5 percent. Blau and Kahn attribute this increase to the adoption of family-friendly workplace policy, like lengthy paid parental leave or flexible working arrangements that enabled more women to enter the workforce – whereas in the past they may not have been able to do so.

This seems like a good thing, Blau and Kahn continue, but there are a few caveats. For one, women in the US were much less likely to work part time jobs than their counterparts in other countries. Additionally, women in the US were much more likely to hold high ranking managerial and professional jobs. They were also more likely to work in professional jobs that have traditionally been dominated by men.

So, the researchers conclude, while the expansion of family-friendly work policies has enabled women to enter the workforce in other countries where they may not have been able to do so in the past, that doesn’t mean all types careers are open to them.

Blau and Kahn suggest that women who would have otherwise been more likely to pursue full-time work in these countries may instead pursue part-time jobs because they are more widely available. Additionally, these policies may lead employers to discriminate against hiring women in some cases because they may believe they will take advantage of long-term leave options. They explain, “Thus, these policies may give women options that they would not otherwise have had. However, they may also leave women less likely to be considered for high-level positions.”

Is There Really a Trade-off?

The study points out that family-friendly policy may have unintended consequences. But, a closer look at the proportion of part time employment by working women reveals a more complicated picture. Examining OECD statistics for working women in the countries the researchers studied does not seem to show correlation between high female workforce participation and part time work.

For example, the Netherlands is number one for part time work for women, with 61.6 percent of employed women working part time for 2010. It is number 10 in women’s workforce participation overall. The number one country for women’s workforce participation in 2010 was Sweden, where the only 17.8 percent of employed women worked part time. Sweden is among the countries with the most generous parental leave and flexibility laws, yet only a small percentage of its female workforce works part time.

Sweden’s percentage of part-time women is only slightly higher than it is in the US, where 17.1 percent of employed women were part-time in 2010.

There may very well be a trade-off between family-friendly working policy and the effects on women’s full or part-time employment. But a re-examination of OECD data does not seem to point to a direct link, and shouldn’t deter countries and companies from enacting policies and cultural shifts toward more flexibility and parental leave.