MOTHERS OR WORKERS?

The extent to which lone mothers are economically active varies substantially across countries, ranging from about three in ten in Ireland and the Netherlands up to eight or nine in ten in countries such as Sweden, Finland and the USA (Table 5.3). To what extent do the different policies across countries account for these differences? Do some countries seek to encourage employment among lone mothers while others seek to discourage it?

Two recent studies have examined whether these differences in employment can be explained by differences in the tax and benefit systems, and specifically whether some countries have systems that offer greater financial incentives for lone mothers to work and hence achieve high employment rates. Mitchell (1992), using Luxembourg Income Study data, concludes that there is no clear association between the apparent financial incentives (as measured by replacement rates and marginal tax rates) and the employment rates. Indeed some countries, such as Sweden, have very high replacement rates (i. e. they offer a lot of support to non-employed lone mothers) alongside very high employment rates. Whiteford and Bradshaw

(1995) base their analysis on model families (as opposed to the survey data used by Mitchell) but draw the same conclusion: that it is impossible to predict employment rates from differences in the tax and benefit systems. Indeed they note: ‘Perhaps the most interesting finding is that in a formal sense work disincentives for lone parents exist wherever there are systems of social assistance. Nevertheless behaviour differs substantially’ (Whiteford and Bradshaw 1994:86).

It is necessary to look outside the tax and benefit system, therefore, in order to understand these variations in employment. Demographic characteristics—age, age and number of children, etc.—play some part. However, these demographic characteristics only seem to account for a small part of the variation between countries (Wong et al. 1992; Mitchell 1992). Whiteford and Bradshaw (1994) point out that there is some association between the employment rates for lone and married mothers such that, in general, high employment rates for lone mothers are found where there are high employment rates for married mothers and vice versa. A recent OECD study of lone mothers’ employment also looks at this point and, having compared different countries on a number of dimensions, concludes that:

[T]he primary explanation for differences between countries in participation by lone mothers lay in factors affecting mothers in general. These factors include the structure of labour markets, relative availability of full-time and part-time jobs, education and training for women, child care and parental leave… measures which encourage participation by women generally and mothers in particular will lead to higher levels of participation by lone mothers.

(OECD 1993:64)

Thus, it is argued, policy does make a difference to employment rates of lone mothers but not simply, or primarily, through the tax and benefit system but rather through the range of measures— employment rights, services, education and financial support—that influence the ease with which it is possible to combine motherhood and employment, to be in the title of the OECD report ‘breadwinners or childrearers’. However, as the OECD report and Whiteford and Bradshaw (1994) both point out, although there is a correlation between the employment rates for lone and married mothers, there are also countries where lone mothers are more likely to be employed than married mothers, sometimes substantially so.

For example, as also shown in Table 5.3, this is the case in Spain (48 per cent for lone mothers and 28 per cent for married mothers), Italy (59 per cent and 41 per cent), Greece (54 per cent and 40 per cent) Luxembourg (62 per cent and 38 per cent), and Germany (58 per cent and 44 per cent). So we need also to account for why this should be the case. If we divide the countries into three broad categories, this helps to understand these differences in patterns of paid work.

1 Countries with high employment rates for both lone and married mothers. Employment is supported by a mixture of services (especially child care), employment rights (especially parental leave arrangements, job protection, and effective equal pay policies), and benefits (especially universal family allowances and maintenance guarantees). The Scandinavian countries plus, to a lesser extent, France and Belgium would fit here.

2 Countries with low employment rates for both lone and married mothers or with low employment rates for lone mothers and high rates of part-time working for married mothers. In these countries there is little support for mothers to enter employment, with low levels of child-care provision, minimal employment rights, and low to middling universal benefits. Married mothers who work thus tend to work part-time and fit in their paid work alongside their domestic work. However, because it is not expected that mothers should be employed, non-employed lone mothers are provided with an income out of work, either from social assistance or designated one-parent benefits. In the absence of much support for employment, staying at home is the most viable option for most lone parents. This group is represented by Ireland, the Netherlands, Luxembourg, the UK and Australia.

3 Countries with low employment rates for married mothers but high rates for lone mothers. These are rather like the second group of countries in that support for mothers to be employed is fairly low (low to middling levels of child care, employment rights and benefits). However, in these countries there is also very little support for those without jobs and without rights to unemployment benefits. Lone mothers without employment thus have to rely either on family support or on low, often discretionary, social assistance benefits. Unlike countries in the first group, which pull lone mothers into employment by positive measures of support, in these countries lone mothers are pushed into employment by the lack of any alternative. The countries of southern Europe are placed here with (to a lesser extent) Germany and Austria. The USA ought to fit here too, although the employment rates for married mothers are higher than might be expected for the group of countries with this pattern.

The three patterns are likely to have rather different outcomes in terms of poverty rates among lone mothers. The first would be predicted to have the lowest rates of poverty, the second to have relatively high rates of poverty but not the greatest depth of poverty, and the third to have high rates of poverty including the most extreme poverty. There seems to be some evidence for this from studies that have compared poverty rates of lone mothers across different countries. For example, Hobson (1994) calculates that poverty rates for lone mothers are lowest in Sweden, followed by the Netherlands, the UK and Germany with the highest rates in the USA. Mitchell (1992), applying regression analysis to data from the Luxembourg Income Study, simulates the effect on poverty and employment rates for lone mothers in Australia if they faced similar circumstances as lone mothers in Sweden and the USA. She concludes that, if Australian lone mothers lived under the Swedish regime, then many more would be employed and poverty rates would fall substantially. If they lived under the USA regime, again many more would be employed but poverty rates would rise substantially. Getting more lone mothers into employment does not always improve their living standards; it can also mean more poverty and insecurity.