Carl Zimmerman forwarded me an interesting article challenging the value of maternity leave in breaking through the glass ceiling:
Harriet Harman’s push for longer maternity leave is undeniably positive for mothers who want to return to the same employer, and it can help women maintain a career foothold after motherhood. But such policies can be harshly counterproductive for women in general, as they prompt employers to avoid hiring or promoting younger women at all.
…
…if mothers do well out of the current system, their right to take maternity leave can still have a detrimental impact on their employers. Take the example of a London secondary school, which recently appointed an energetic young head with a glowing reputation. But within four years the school was failing so badly that it had to be taken over. Part of the problem was that the new head had had two pregnancies, with two long spells of maternity leave, and then struggled to combine caring for two small children with a demanding full-time job. Although undoubtedly skilled, in practice she was unable to properly perform the role for almost four years. The school had, in effect, been headless.
…
The strongest evidence of this problem comes from Sweden—often cited by advocates as offering the ideal system, with long parental leave, the right to work part-time, time off for sick children and so forth. Yet several studies by Swedish economists have shown that family-friendly employment policies has been the cause of the glass ceiling for women, not the solution to it. The pay gap in Sweden fell from 33 per cent in 1968, before generous maternity protection was first introduced, to 18 per cent by 1981. But it has been rising gradually ever since then. The reason? Onerous maternity protection leads the private sector to systematically avoid hiring women, who then mostly work in the less well-paid public sector.
The sad result is that the more generous the maternity rights, the less likely women are to reach the top. A 2009 paper by Swedish economist Magnus Henrekson confirms that women are much more likely to reach top executive positions in Anglo-Saxon countries—and especially the US, which has only 12 weeks’ unpaid maternity leave—than in Scandinavia. Other research finds that maternity leave of around three to four months helps women’s employment, but that longer periods lead to what economists call “statistical discrimination” against women collectively. Forcing fathers to take paternity leave, meanwhile, has done little to change sex-roles in Scandinavia, while the vast majority of Swedish mothers were against sharing parental leave with their spouses in surveys carried out before the change was introduced.
The basic problem is that businesses are reluctant to employ women who might have kids because they are then likely to leave the firm or do a lousy job. The result is that women are less likely to be put into important positions where they acquire specialised and hard to replace knowledge and skills. That is to say, most highly valued professions.
Apparently this is bad because it increases the gender wage differential and is ‘unfair’ for women who do not intend to have children but are discriminated against as though they will.
There are two extremes we can use to investigate this dynamic.
If the men and women involved do not have any private knowledge about whether they will want to leave their career to care for children in the future or not and are unwilling to commit right away, then actually there is no problem to correct. It is inefficient for people who might drop their careers soon to be in certain kinds of jobs. At the extreme this is obvious: nobody would suggest NASA should be indifferent to the level of commitment someone has to their career before beginning to train someone as an astronaut. For many positions, a long-term and guaranteed commitment to the position is an important qualification. To ignore commitment, even if it made it easier for some female astronauts to be indecisive about having kids, would just be too costly. If in fact women are much more likely to choose to abandon their careers for children, then it is efficient to employ fewer of them in jobs for which commitment is especially valuable.
If a women values both obtaining such a job and having children (or maintaining the option to do so in the future), she could achieve this by compensating her employer with lower wages than men or childless women. This may go some way to explaining women’s lower wages.
Alternatively, let’s imagine everyone knows perfectly well whether they will want to leave their jobs to raise children or not, but their potential employers do not. In this case we have a problem called ‘asymmetrical information‘ which could lead to ‘adverse selection‘ if employers cannot find a way to distinguish between these two groups. If potential employees cannot credibly signal when they are members of the career-committed group or not, people will end up in jobs mismatched to their level of commitment; the career-committed group will be discouraged from working (they will get lower wages than their productivity would call for); and the uncommited group will be encouraged to work more than they should (because they will over their lives get higher wages than their productivity calls for). Fortunately people who are career committed and do not intend to have children can indeed signal this to potential employers through sterilization or, less drastically, through contractual commitments such as fines for having children while in the employment of a firm. If we don’t see such signalling, this presumably means people don’t know their future plans, can signal their level of commitment effectively in other ways or that such methods are impossible (fines are not possible to recover or sterilization can be undone).
Either way, it seems there is nothing a government or do-gooder could do here to improve the situation except facilitate people’s ability to credibly signal their intention to have children or not.
If the fact that women are more inclined to take time off from their careers to raise children and do other non-market labour is judged an unfortunate burden for them (the opposite of the truth in my view given parents in partnerships report preferring caring for children to work), then the best thing would be to redistribute money to women by charging them lower taxes or offering more generous welfare. To be consistent hopefully though they would also be charged through taxes for their higher life expectancies!
Should we change parenting gender norms?
A friend of mine also suggested this:
It would make sense for the government to offer very generous paternity leave, more generous than anything women got. This would help coax more men into become stay-at -home fathers and to leave women as the bread-winners. This would have two advantages: in the long term breaking down genderstyped contraints about work/parenting in society; secondly making it harder for employers to reject women in lieu of a man, if they suspect the woman’s going to leave to have a baby, because men would be just as likely to do the same.
Assuming this paternity leave were successful at coaxing men into becoming stay-at-home fathers, though the story above suggests this is unlikely, would this be beneficial? If gender stereotypes are such that even women who are committed to their careers or men who are committed to being stay-at-home fathers were unable to do so, it might. The above would suggest that women who are truly sure they don’t want to have children are able to display this to potential employers when it is important. But it’s harder for a woman to prove that her husband will look after the kids until he does so so reducing gender norms could be useful for a women in that situation (though it would also increase their number and perhaps the aggregate cost). Potential stay-at-home fathers could be prevented from following their ambition by the disrespect of friends and family or being unable to find a partner who wants a career instead. Reducing gender norms helps with the first. But increasing preferences diversity within genders makes finding a compatible partner harder: if all women want children and all men want careers it is easier to find a partner who wants the opposite to you than if half of each gender wants each option.
Making both genders equally likely to care for kids also has the downside that it will increase job-commitment mismatch by making it harder for anyone to guess ahead of time who will be committed and who will not.
Given that both market and non-market work (housework and child rearing) has to be done, it’s possible that we’re better off socialising each gender to enjoy a different job. That way nobody need suffer a task they dislike. While in theory we could pick men and women at random and encourage them to value one or the other task, it is easier to socialise genders as a group; messages are easily targetted and made persuasive for gender groups in a way impossible for randomly chosen groups. This benefit is smaller if innate preferences or aptitude for market and non-market work are strong and cut randomly across gender lines (something I know little about).
Tagged: asymmetrical information, efficiency, gender, modelling, signalling
