Family friendly backfires

Last month a NYT article by Claire Cain Miller documented some of the backfires associated with family friendly policies. For instance:

Unlike many countries, the United States has few federal policies for working parents. One is the Family and Medical Leave Act of 1993, which provides workers at companies of a certain size with 12 weeks of unpaid leave.

Women are 5 percent more likely to remain employed but 8 percent less likely to get promotions than they were before it became law, according to an unpublished new study by Mallika Thomas, who will be an assistant professor of economics at Cornell University. …

The child-care law in Chile, the most recent version of which went into effect in 2009, was intended to increase the percentage of women who work, which is below 50 percent, among the lowest rates in Latin America. It requires that companies with 20 or more female workers provide and pay for child care for women with children under 2, in a location nearby where the women can go to feed them.

It eases the transition back to work and helps children’s development, said María F. Prada, an economist at the Inter-American Development Bank and lead author of a new study on the effects of the law. But it has also led to a decline in women’s starting salaries of between 9 percent and 20 percent.

I am not sure there exists a family friendly policy that doesn’t “backfire” in some dimension. These policies tend to have multiple objectives and there are trade-offs between these objectives. That holds even if these policies are publicly funded and place no burden on employers.

First, those objectives. Policy makers want women to be able to have children while having a career. They are pronatalist. They want women (and sometimes men) to be able to take time out of the workforce to care for their children. They want high-quality care for children. And they want men and women to have the same level of pay. You can’t have them all.

Consider this trade-off in the light of the AER article by Claudia Goldin suggesting gender pay disparities are because women find it difficult  to work the long hours many jobs now require. How can you facilitate those long hours?

One option is to discourage having a family, which tends not to be the preferred route (unless you are a tech company offering to subsidise egg freezing services).

Alternatively, you can provide subsidised or free childcare, which will reduce the cost of having a family and enable the mother to return to work faster. But this also increases the attractiveness of having a family, which increases the number of children and constrains potential hours worked. And even with free childcare, the mother will likely take some time off.

Alternatively, take Paul Seabright’s argument in War of the Sexes that much of the wage gap is due to gender differences in networks. When you take time out of the workforce, your networks suffer. Women are more likely to take time out of the workforce.

One of Seabright’s ideas to counter this is compulsory paternity leave. Gender neutral parental leave arrangements are also floated at the end of the NYT article. However, compulsory paternity leave effectively converts the penalty on women into a penalty on families. The gap will be between those with and without children. And now that the birth may be timed to fit in with the man’s career, it is possible that the birth may be timed even less suitably for the woman.

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