All in the family

AMID the furore of America’s bizarre presidential election, it is easy to forget that history may be made. If elected, Hillary Clinton will be the first female president. Her achievement would be one manifestation of arguably the most important social change of the past century. At the start of the 1950s only about one-third of American women worked, compared with almost 90% of men. Today 57% of women are in work, while the share of men is just under 70%. This shift has added trillions to economic output, and allowed women who might otherwise have been stuck at home to start companies, invent new products, advance the course of science or simply to earn a living of their own. It also transformed life within the home. Yet American policymakers have responded painfully slowly to this new reality.

America is an extraordinary outlier in the quality of its safety net for families. It does not require firms to provide any paid family leave (when, for example, a child is born). The average in the OECD, a club of mostly rich countries, is 54 weeks. As a share of GDP, total spending on family benefits in America, at 1.6%, is well below the OECD mean. And a third of that takes the form of tax breaks—not much use to poorer families, which pay little income tax in the first place.

Mrs Clinton, it seems, means to fix this. She has named Heather Boushey as chief economist in her transition team (putting her in line for a top job in a Clinton administration). Ms Boushey, currently at the Washington Centre for Equitable Growth, a left-leaning think-tank, has made inequities in the labour market the focus of her research.

Despite decades of advances, the gender gap remains wide. Women are still under-represented in senior positions and among entrepreneurs. That helps to explain why the median female wage is 80% of that of men, lower than the OECD average. Worryingly, progress may be slowing. The proportion of women in the American workforce—which remains lower than in much of western Europe—has declined in recent years. The share of professional degrees earned by women soared from almost nothing to above 40% in the early 2000s, but has since fallen.

In “Finding Time: The Economics of Work-Life Conflict”, a book published earlier this year, Ms Boushey argues that America’s labour-market troubles are largely the result of its failure to grapple with changes in family structures. Women once stayed at home, cooking meals, ironing clothes and looking after children while their husbands went out to work. This division was not universal—in poorer families, especially, women have long been employed outside the home. But it was the norm.

As women joined the paid labour force in increasing numbers, more household responsibilities were shoehorned into the hours outside work. (Although men do more in the home than they used to, women still carry out the bulk of domestic duties.) Some can afford nannies and cleaners to help out. But many families, and especially women, have too much to do and too little time in which to do it. That may in turn push them to give up formal work. Family-friendly policies almost certainly boost labour supply. The OECD reckons, for example, that increases in paid leave up to a total of two years raise women’s participation in the labour force.

Ms Boushey therefore wants America’s government to step into parts of workplaces and homes that it has hitherto chosen to avoid. In her book, she recommends reinforcing America’s safety net to make it more like those in Europe: to grant workers more paid time to care for new babies or ailing relatives; to allow greater flexibility in working time; and to provide greater support for the education of pre-school children. Those all sound like a boon for hard-pressed households. But is the government really needed to supply them?

With her co-authors, Ms Boushey argues that better family-leave policies should not only improve the lives of struggling families but also boost workers’ productivity and reduce firms’ costs. In research with Sarah Jane Glynn, of the Centre for American Progress, another left-leaning think-tank, Ms Boushey found that the cost to employers of replacing workers who leave (for any reason, from a new job to parenthood) could amount to between 15% and 20% of annual pay, even in occupations paying less than $30,000 per year. Doing good for workers should, therefore, be good for businesses and for the economy. Other research suggests that more flexible work rules reduce absenteeism and increase productivity.

But if enlightened family policies enable firms to raise their workers’ productivity and cut costs, they ought to be leaping to provide them themselves. At the very least, the cost of hiring replacements ought to give hard-pressed employees—those who are pregnant, say, or who have to care for elderly parents—room to bargain for better treatment. On the face of things, new government rules and regulations are unnecessary.

Inside out

Some companies have indeed spotted that it pays to be kind to their staff: when Google increased paid maternity leave from 12 to 18 weeks in 2007, the rate at which new mothers left fell by half. But big, profitable companies such as Google are better placed than most to notice the opportunity and act upon it. In firms employing a handful of people rather than many thousands, it can be debilitating if someone takes six months off. Here a nudge from the state may help. Broad social insurance could help smaller companies to share the financial load: they would pay into a fund, from which they could draw when employees go on parental leave, say. There are no easy answers here. But Mrs Clinton’s team have at least started to ask the right questions.

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