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OCR for page 155
7
Family-Oriented Programs
in Other Countries
As policy makers in the United States consider ways to reduce the
tensions between work and family responsibilities, and especially as they
consider the question of appropriate roles of governments, employers, and
workers, the United States has the advantage of being able to learn from the
experiences of other advanced industrialized countries. The panel is well
aware of the difficulties inherent in cross-national comparisons, given the
multiple historical, economic, cultural, and social differences among coun-
tries. Our focus on policies toward workers' family responsibilities neces-
sarily constitutes a relatively narrow slice through a very complex web of
arrangements. Despite the inevitable oversimplification that such an effort
entails, we believe that the comparative perspective provides useful insights
into the issues as faced in the United States. For the most part, we focus on
Western Europe and Canada, which have private enterprise economies simi-
lar to the United States. Unlike the United States, however, these countries
have extensive family-oriented benefit programs. This chapter begins with
an examination of differences in the general approach to social welfare
issues between the United States, Canada, and Western Europe.
PERSPECTIVES ON SOCIAL POLICY
Social Insurance Provisions
The countries of both North America and Western Europe have policies
and programs to protect and assist individuals and families. As Rein (1989)
emphasizes, the support comes from employers and governments. On a
country-by-country basis there are substantial differences in levels of assis
155
OCR for page 156
156
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
lance and how it is provided. These differences reflect the unique history
and values of each country.
Germany was the first nation to introduce social insurance. The concept
originated in Prussia as part of Chancellor Otto von Bismarck's social re-
forms of the 1870s and 1880s. Social insurance provided ordinary working
people with protection against loss of income due to sickness or old
age. The institutional form that Bismarck devised employment-based
insurance has provided the framework for meeting social needs through-
out the developed world. The German social insurance model was soon
imitated in several other countries. Emerging labor movements created de-
mand for the programs, and strong, centralized bureaucratic governments
had the capacity to provide them (Alber, 1981~.
The United States and Canada instituted social welfare programs much
later than European countries. Of the many possible explanations, an impor-
tant one is surely the strong American tradition of individualism (Lodge,
19871. American reliance on individual effort rather than collective secu-
rity has been ascribed to a wide variety of factors, including the absence of
a feudal tradition, the emergence of a democratic political system before the
emergence of a strong working-class movement, and the relatively high
level of per capita income (Kudrle and Marmor, 1981~. It has also been
suggested that the early union movement in the United States was not very
interested in welfare programs because it was dominated by elite skilled
workers who could do relatively well by relying on market forces (Qua-
dagno, 19881. The inception of the United States in a revolution directed
against a powerful central government whose economic policies were bit-
terly resented by the colonists may also have had an effect.
The United States and Canada have also been strongly influenced by the
frontier tradition. The self-reliance and rugged individualism necessary to
survive in the early days of these nations established an outlook markedly
different from that of Europe. Medieval serfs were attached to a manorial
estate, craft workers of the Middle Ages belonged to guilds, and laborers of
the industrial revolution were crowded into communities or company towns
surrounding the factories and mines that came to be the focus of their
existence. These populations grew up with an acceptance of communal
responsibilities that has remained largely foreign to Americans (Alber, 1981~.
In addition, there is a widely held belief that the ethnic and racial diver-
sity of the United States has contributed to the country's reluctance to
support public welfare programs. People appear more willing to reduce
their own standard of living on behalf of their neighbors, or perhaps their
neighbor's children, when they share the same language, the same religion,
and the same color. Countries that define citizenship by heredity rather
than place of birth commonly adopt generous pronatalist policies when
faced with declining birth rates and labor shortages, since these countries
OCR for page 157
FAMILY-ORIENTED PROGRAMS IN OTHER COUNTRIES
157
are not willing to encourage or even permit significant immigration. An
exclusionary view of citizenship is the less generous manifestation of such
tightly knit cultures. The United States, a nation of immigrants, has ac-
cepted immigration from throughout the world and has relied on that flow
to sustain its work force. This may explain the absence of significant
pronatalist programs in the United States.
Such historic and cultural differences are extremely important in under-
standing the differences in the auspices and coverage of social welfare
policies and programs between the United States and Western Europe. A1-
though there are very significant differences between policies and pro-
grams among European nations, a number of common principles distinguish
them and Canada from the United States. The most important is the prin-
ciple of universality. With some exceptions, the major social welfare pro-
grams cover everyone in the country with a relatively uniform set of
benefits or entitlements. In the United States, only Social Security begins
to approach universality of coverage, and even its benefits are limited to
subsets of the total population.
Social Welfare Expenditures
Table 7-1 shows social welfare expenditures for seven European coun-
tries and the United States. Most of these expenditures in the European
countries are provided through government, the revenues coming either
from earmarked payroll taxes or general revenues. The first column shows
TABLE 7-1 Social Welfare Expenditures of
Selected Countries in the European Community as
a Percentage of Gross Domestic Product
Expenditures
Country Mandated Nonmandated Total
Belgium 27.9 t.5 29.4
Denmark 27.6 1.1 28.7
Federal Republic
of Germany 26.9 2.2 29.1
France 23.1 5.4 28.5
Italy 22.3 1.0 23.3
Netherlands 29.6 4.1 33.7
United Kingdom 19.5 4.6 24.1
United States 14.1 7.5 21.6
SOURCE: Adapted from Rein (1989:Table 1).
OCR for page 158
158
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
that expenditures on programs established by law including disability,
accident, old age, and survivors' insurance and maternity and family allow-
ances are dramatically higher in Europe than in the United States. For
instance, the Netherlands' share of gross domestic product (GDP) spent
on their programs is slightly more than twice that of the United States. But
looking only at government-financed or required programs underestimates
the amount of spending on such social welfare items.
Many programs established under law in European countries, such as
health insurance and old age pensions, are often provided by firms on a
voluntary basis in the United States. The second column in the table shows
that voluntary spending by U.S. firms far exceeds that in European coun-
tries. Overall, while the United States still places last in total share of
GDP for social welfare programs, the difference is much smaller if volun-
tary spending is also counted.
A critical difference remains, however. Universal benefits established
by law ensure that all residents have at least a minimum set of benefits and
generally result in significant subsidization of low-income workers. Vol-
untary benefits in the United States are provided disproportionately to higher-
income workers, leaving millions of low-income families without.
Lower U.S. expenditures for social welfare programs result in lower
overall public-sector spending in the United States compared with Canada
and Western Europe. This has important effects on the economy, such as
permitting lower tax rates and increasing discretionary income for most
households. Budget data for 13 advanced industrialized countries are shown
in Table 7-2. In terms of expenditures by the central government only, the
United States ranks eleventh, lower than all except Canada and Switzer-
land. When local, state, regional, and provincial governments are included,
it ranks thirteenth. As shown in column 4, defense is a larger percentage of
government expenditures for the United States than for any of the other
countries. U.S. defense expenditures account for about 26 percent of the
federal budget twice as high in the United States as in the United King-
dom. Nondefense expenditures for the other 12 countries average 48 per-
cent of GDP, compared with 31 percent in the United States. Even when
higher U.S. defense expenditures are taken into account, total public-sector
spending is still lower than in the comparison countries.
The tax structure in the United States differs in some respects from that
of the European countries as well. While international comparisons of tax
structures are complex (Messere and Owens, 1987', some general compari-
sons can be made. The U.S. reliance on payroll taxes for about 30 percent
of federal revenues is about the same as the average for the other 12 coun-
tries. The 9 percent collected from corporate income taxes is marginally
above the average of 7 percent. The 43 percent collected in personal in-
come tax, however, is about double the average for the European countries,
OCR for page 159
FAMILY-ORIENTED PROGRAMS IN OTHER CO UNTRIES
TABLE 7-2 Government Expenditures in Western Europe, Canada,
and the United States, 1986
159
Government Expenditures
Defense as a
as a Percentage of GDPa
Percentage of
General Central
Country CentralC Generald Civilian Expendituresb
Belgium 4.0 (prelim.) 58.0 (prelim.) 55.0 5.0 (prelim.)
Canada 23.2 47.3 45.4 8.0
Denmark 41.2 (1985) 59.5 (1984) 57.5 5.1
Federal Republic
of Germany 30.5 (prelim.) 48.1 (prelim.) 47.2 8.9
Finland 31.4 43.6 40.2 5.3
France 45.1 49.9 (prelim.) 40.9 6.3 (1985)
Italy 51.3 49.8 (1984) 48.3 3.1
Netherlands 53.8 61.9 59.0 5.2
Norway 41.1 (prelim.) 54.1 51.0 8.0
Sweden 45.0 61.7 58.7 6.5
Switzerland 21.4 (1984) 38.0 (1984) 35.9 (1984) 10.3 (1984)
United Kingdom 39.9 43.8 38.6 13.2
United States 25.0 37.4 31.0 25.8
Average,
excluding U.S. 39.8 51.3 48.1 7.1
aGovernment expenditures and lending minus repayments.
hThese expenditures, calculated by subtracting defense expenditures from expenditures as
percent c,! GDP, are not limited to social welfare programs.
CFrom 1988 Yearbook.
dIncludes central plus local, state, regional, or provincial.
SOURCE: Adapted from International Monetary Fund (1989:58, 92, 94, 112).
although only slightly above the 40 percent collected by Canada. The dif-
ference is more than compensated for by the 29 percent of taxes on goods
and services and 18 percent value-added taxes raised by the European na-
tions, compared with less than 4 percent in excise taxes in the United States
and general sales taxes that vary between 0 and 8 percent among states
(International Monetary Fund, 19881. The relatively low level of govern-
ment expenditures and the reliance on income tax in the United States
may be more than coincidental. Wilensky (1976) argues that opposition to
government expenditures tends to be greater when a country relies heavily
on "painfully visible" taxes, but it is not related to the level of taxation
per se.
Overall, taxes as a proportion of the GDP are lower in the United States
than in eight of the other countries (except Canada, Finland, Norway, and
Switzerland), substantially so in most cases. So even though individual
OCR for page 160
160
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
income taxes provide a larger share of revenue in the United States, they do
not necessarily constitute as large a burden, especially since the 1986 tax
reform, when the top tax bracket was reduced to 32 percent; it is as high as
75 percent in Sweden. Similarly, corporate income taxes and payroll taxes
are relatively low in the United States (Pechman, 19881. As for sales and
value-added taxes, which in the last analysis are also borne by individ-
uals and businesses, they are very much smaller in the United States as a
proportion of total taxes and even more so as a proportion of GDP. Higher
total taxes in many of the European countries are in part the result of
extensive social welfare and labor market programs. The next section de-
scribes specific policies and programs. We return later to the question of
the effects of the higher taxes and larger social welfare expenditures on
the economy and on the quality of life.
PROGRAMS ESTABLISHED BY LAW
Holidays and Vacations
Working people in Western Europe have more paid time off from work
than do their counterparts in the United States. All countries in Western
Europe, with the exception of the United Kingdom, stipulate a legal mini-
mum vacation period, usually 3 to 5 weeks starting with the first year of
employment. Table 7-3 provides this information for most of the Organisa
TABLE 7-3 Mandated Public Holidays and
Annual Leave in Countries of the Organisation for
Economic Cooperation and Development
Country
Public Holidays Annual Leave
(1980) (1983)
Belgium 10 24
Denmark 9.5 30
Federal Republic of Germany 11 - 13 18
France 10 30
Italy 9- 10 20-26 (1978)
Netherlands 8 15- 18
Norway 9 (1978) 20
Sweden 10 25
United Kingdom 8 15-20
SOURCES: Data on public holidays, Organisation for Economic
Cooperation and Development (1986); on annual leave, Organisation
for Economic Cooperation and Development (1983).
OCR for page 161
FAMILY-ORIENTED PROGRAMS IN OTHER CO UNTRIES
161
lion for Economic Cooperation and Development (OECD) countries. Holi-
days vary from 8 in the Netherlands and the United Kingdom to 11 to 13 in
West Germany (varying by region); annual leave varies from 15 to 18
days in the Netherlands to 30 in Denmark. Collective bargaining agree-
ments often extend vacation time beyond the statutory requirements.
From the point of view of businesses, paying employees for time not
worked amounts to an increase in the wage rate, which may or may not be
compensated for by increased morale and productivity. Since additional
free time, unlike additional income, is not taxed, it is an attractive alterna-
tive for employees. Also, when holidays are official nationwide, no one has
to worry about competitors staying open.
In comparison, vacations in the United States average 9 days after 1 year
of employment, 13 days after 5 years, and 16 days after 10 years (Andrews,
19881. There are no mandatory national public holidays and no legal re-
quirement that employees be given vacation time. Individual states declare
public holidays, but this does not mean that all nonessential businesses
have to close.
Maternity and Family Leaves
The concept of maternity leave is so widely accepted that, of the 118
countries covered in a survey by the International Labour Organisation
(1985), only the United States lacked any national legislation regarding
maternity rights and benefits. Maternity leaves date as far back as 1878 in
Germany, 1928 in France, and 1937 in Denmark, Finland, and Sweden;
other countries instituted them after World War II. Although specific pro-
visions vary from nation to nation, all European plans contain three basic
elements: entitlement to a specified period of time away from work before
and after the birth, cash benefits payable during the leave period, and pro-
tection of job rights.
The European policies were developed in response to varied national
concerns, and the policies and programs reflect these differences. Mater-
nity leaves reflect an interest in the well-being of mothers and infants but
also, in times of low fertility and labor shortages, an effort to encourage
employed women both to have more children and to remain in the labor
force. Questions raised by some experts about the effects of full-time day
care for infants (and the high cost of such care) have motivated leaves so
that parents can stay at home with infants (Kamerman, 1988~. Maternal
care of infants is so strongly endorsed in the Federal Republic of Germany,
for example, that mothers are not only provided with paid leave but are
actually forbidden to work in the 8 weeks following childbirth.
While there are significant differences in leave provisions among Euro-
pean countries, in all cases policies are more generous than those in the
OCR for page 162
162
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
United States (Kamerman, 1988; Moss, 1988; Zigler and Frank, 1988).
Sweden offers the most extensive leave, with the most generous payments,
funded through the social insurance system. When both parents have been
gainfully employed at least 180 days, the couple is entitled to share 270
days of leave at 90 percent of their regular pay, an additional 90 days of
leave paid at a flat rate by the employer, and up to 18 months of leave
without pay. The leave need not be taken all at once; it can be distributed
over the first 4 years of a child's life. Upon returning to work, the em-
ployee is entitled to the same or an equivalent position (U.S. Department
of Health and Human Services, 19851. Parents may also use up to 90 days
of leave a year to care for a sick child and 2 days of paid leave to visit a
center or school (Galinsky, 1989a).
In the Federal Republic of Germany women are entitled to a paid leave
of 6 weeks before and 8 weeks after childbirth, the latter to be extended in
case of a premature birth. The health insurance fund pays part of the wage,
and employers must contribute the rest, but companies with fewer than
20 employees are reimbursed for 80 percent of the costs (Galinsky,
1989a). An additional 12-month unpaid leave for all parents, with an educa-
tion allowance paid by the government, was instituted in 1989 (Galinsky,
1989a). Among 11 other European countries, Greece and the Netherlands
mandate 12 weeks of maternity leave and Finland provides for 11 months;
the eight other countries fall between these two points. Also, the three
other Scandinavian countries and the Federal Republic of Germany make
the leave available to fathers as well as mothers. Denmark, Italy, and Swe-
den have some paid parental leave, and several other countries have unpaid
parental leave that may be taken by either parent up to some specified age
of the child.
In most European countries, maternity and paternity leaves at the time of
birth are provided through national insurance, but in some cases they are
offered through unemployment insurance or special maternity or employ-
ment funds. Thus, employers generally do not pay directly; they pay indi-
rectly by contributing to the funds. Either way, however, some direct ex-
penses are added to the costs related to the absence of workers while on
leave. Spreading the cost through social insurance mechanisms shields
small employers or those with unusually large numbers of young women
employees.
Even so, the policies are costly, especially for small employers who may
have difficulty in adjusting workloads. However, studies have documented
benefits, such as using the temporary opening to provide on-thejob training
for a promising lower-ranking employee; Galinsky (1989a) provides an ex-
ample of this from a Swedish company. To the extent that costs outweigh
benefits, the harm done to individual businesses is mitigated by the fact that
not only are others in the same country subject to the same rules, but also
OCR for page 163
FAMILY-ORIENTED PROGRAMS IN OTHER CO UNTRIES
163
competitors in many other countries are subject to similar rules. Maintain-
ing rough equivalence in the costs of nonwage benefits within the European
Economic Community is a strong concern to the business community
(Stoiber, 1989~.
The full impact of parental leave for workers is not clear. So far, even
when both parents are eligible, it is predominantly mothers who avail
themselves of the opportunity to take leave. They are therefore seen as the
chief beneficiaries. It is argued, however, that as long as employers expect
women but not men to take time off, they will inevitably prefer to hire and
promote those who are less likely to inconvenience them. Beyond that,
prolonged absences tend to slow down progress in jobs that have career
ladders, when others do not take time off. For example, in Sweden women
are concentrated to an exceptional degree in public-sector jobs, where the
costs associated with prolonged leaves are more easily managed (Stoiber,
1989).
As Pleck (1989) points out, however, the disparity in the use of parental
leaves in Sweden, the country that has had the longest experience with
them, has declined over time. By the late 1980s about 85 percent of fathers
took an average of 8.5 days of the 10-day postbirth benefit. Roughly 25
percent of fathers took more than a month of the regular and special leave
during a child's first year, and in any given year 30 percent of fathers with
children under age 12 took an average of 5 "temporary leave days" for child
care. Thus, the reality is that relatively few Swedish fathers take long-term
leave in lieu of the mother's remaining at home, but a very high proportion
take some parental leave. There is also evidence, both in Sweden and the
United States, that fathers are considerably more inclined to take leave in
order to care for children when it is not labeled parental (fleck, 1989~.
Fathers and mothers in Sweden are equally likely to avail themselves of
leave to take care of sick children, both averaging 6 to 7 days a year.
In Western Europe the elderly receive substantial income transfers, so
their economic position has improved in recent years relative to the rest of
the population. However, there is a virtual absence of specific policies
addressed to helping employees who need to care for older members of the
household (Committee on Population, 1987), although workers are gener-
ally entitled to some personal leave that may be used for this purpose.
Customs and laws with respect to leaves that are available differ consid-
erably. For instance, France requires employers to allow unpaid leave for
personal reasons with entitlement to reemployment and seniority and to
permit paid time away from work for routine child care needs, as is true in
the Scandinavian countries and the Federal Republic of Germany. Cur-
rently the European Economic Community (EEC), which includes Belgium,
Denmark, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg,
Portugal, Spain, and the United Kingdom, is considering legislation permit
OCR for page 164
164
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
tiny both men and women short periods of leave for "pressing family rea-
sons" (Stoiber, 19893.
Longer vacations and the availability of a wider variety of leave policies
enable workers to cope better with family emergencies as they arise, even
though that is not always the explicit purpose of those policies. Flexibility
is particularly important in the case of needs related to members of the
family other than children, because only rarely are there specific arrange-
ments for such problems.
VOLUNTARY PROGRAMS
Part-Time Work
Most businesses in the advanced industrialized countries expect their
employees to work a standard week. The number of hours and their sched-
uling may differ from time to time, from place to place, and by type of
industry, but they are generally determined by employers; workers usually
have little discretion except perhaps when they initially choose a job that
requires a particular number of hours. The average number of hours actu-
ally worked in nine Western European countries in 1980 varied from 41
in Spain to 36 in Norway and Sweden, compared with 47 in Japan and 39
in the United States (Organisation for Economic Cooperation and De-
velopment, 19861.
The most important exception to this pattern is part-time work, which
is growing in most industrial countries, for a variety of reasons. This type
of arrangement, which may involve working fewer hours per day, fewer
days per week, or fewer weeks per year, is most commonly used because it
suits the purposes of the employer and is accepted by workers because it
is the best opportunity available given their needs and desires. Recently,
such involuntary part-time workers have been a small but growing min-
ority (Organisation for Economic Cooperation and Development, 1986~.
But there have also always been workers who preferred to work less than
full time, such as those who combine work and education, older people in
transition to retirement, or men who take a second job. A large proportion
of the growing numbers of part-time workers, however, are women, and
perhaps even some men, who want to combine holding a job with more time
for their family.
Table 7-4 shows the increase in part-time employment in recent years
and that in most countries a substantial minority of women are part-time
workers. Women constitute a relatively low share of part-time workers in
Finland and Italy, where few women work less than full time, and in Canada
and the United States (Organisation for Economic Cooperation and Devel-
opment, 19881.
OCR for page 165
FAMILY-ORIENTED PROGRAMS IN OTHER COUNTRIES
TABLE 7-4 Part-Time Employment in Europe and the United States,
1979 and 1986
165
Part-Time Employment as a Proportion of Women's Share
Total Male Female in Part-Time
Employment Employment Employment Employment
Country 19791986 1979 1986 1979 1986 1979 1986
Belgium 6.08.6a 1.0 1.ga 16.5 2l~la 89.3 86.1a
Canada 12.515.6 5.7 7.8 23.3 25.9 72.1 71.2
Denmark 22.723.8a 5.2 8.4a 46.3 43.9a 86.9 80.9a
Fed. Republic
of Germany 11.2l2.3C 1.5 2.1c 27.6 28.4C 91.6 89.8C
Finlandh 6.78.1 3.2 4.9 10.6 11.5 74.7 68.7
France 8.211.7 2.5 3.5 17.0 23.1 82.0 83.0
Italy 5.35.3a 3.0 3.oa 10.6 10.1a 61.4 61.6a
Netherlands 11.124.0a 2.8 8.7a 31.7 s4.2a 82.5 76. la
Norwayd 27.328.1 10.6 10.3 51.6 51.3 76.8 79.2
Swedene 23.623.5 5.4 6.0 46.0 42.8 87.5 86.6
United
Kingdom 16.421.2a 1.9 4.2a 39.0 44.9a 92.8 88.5a
United
States 16.417.4 9.0 10.2 26.7 26.4 67.8 66.5
NOTE: Part-time work is defined and measured in different ways and covers different
situations in each country; the definitions applied in each country are set out in Annex 1.B of
Employment Outlook (Organisation for Economic Cooperation and Development, 1987).
al985.
bExcludes conscripts but includes people for whom hours of work were unspecified.
C1984.
dExcludes people for whom hours of work were unspecified.
eStarting in 1986 the Swedish data are based on people ages 16 to 64. The data for 1979
have been recalculated to conform to the new age span of the labor force survey.
SOURCE: Adapted from Organisation for Economic Cooperation and Development (1987:
Table 1.3).
Increases in the numbers of part-time workers are strongly related to the
growing numbers of women in the labor force. Other factors also play a
part. When demand for labor is slack, for example, a larger number of
people can be employed part time, reducing the number of people who are
unable to find any work. Thus, part-time employment increased rapidly in
some of the European countries between 1973 and 1983, when full-time
employment increased very little and in some instances even declined. The
Netherlands has particularly favored this approach, which explains the enor-
mous rise in part-time workers in that country. Policies instituted to ease
the transitions of workers into or out of the labor market may also encour
OCR for page 168
168
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
of a renaissance of work in the home, often as an economy measure in
response to competition from growing industries in developing countries.
As in the United States, most home-based workers in Europe are un-
skilled women, often immigrants, although firms are beginning to take ad-
vantage of opportunities made possible by new technological developments
(Lipsig-Mumme, 19831. In such firms, employees are generally highly
skilled. One report (Bailyn, 1988) from the United Kingdom, however,
suggests that even highly skilled workers will find home work most useful
for jobs for which output is critical and for which periods of extended
concentration are necessary, but not for the most creative tasks, which tend
to require interaction with other people. Estimates of the number of work-
ers involved range from 100,000 to 150,000 for the United Kingdom to 3
million for Italy (Lipsig-Mumme, 1983), where the practice is in part a
continuation of traditional home work.
GOVERNMENT CHILD CARE PROGRAMS
Just as the presence of a growing proportion of mothers of young chil-
dren in the labor market has brought greater emphasis on family leaves, it
has also focused attention on child care; the two issues are to a great extent
complementary. In countries in which parents can stay home, say, for the
first year of a child's life without much loss of income, fringe benefits, and
seniority, there is far less need for purchased infant care. In Sweden, for
instance, almost all children under 9 months of age have at least one parent
at home (Broberg, 1988~. According to some experts, this may be a good
solution both for children and parents, although there is some evidence that
a long leave may have detrimental effects on a person's career (Hayes et al.,
1990; Zigler and Frank, 1988~.
In general, efforts to make more and better care facilities available in
Europe tend to be concentrated on children over age 1. Progress toward
this goal, however, remains uneven; nor is there adequate information to
what extent various countries are meeting the demand for child care (Moss,
1988; Kamerman, 19881. Estimating the demand for child care is difficult.
We therefore concentrate on an examination of the availability and funding
of such care and, to the extent possible, its quality.
A number of European countries have significantly expanded the provi-
sion of child care for preschoolers between ages 3 and 5 or 6, when compul-
sory education begins. Such care is seen as a government responsibility,
regardless of families' income and employment status. The proportion of
children in this age group cared for in publicly funded institutions is esti-
mated to be as high as 95 percent in Belgium and France, 90 percent in
Italy, and 85 percent in Denmark. Under these circumstances, very few
employers are involved in child care, except in the Netherlands, where there
OCR for page 169
FAMILY-ORIENTED PROGRAMS IN OTHER COUNTRIES
169
is little government-sponsored care (Moss, 1988~. There is little out-of-
home care for toddlers in any of the countries or after-school care for older
children (Kamerman, 1988~.
The French program of "ecole maternelle," which dates back as far as the
nineteenth century, is perhaps the best known. Ecole maternelle is operated
as part of the publicly financed education system. All children from 27
months on are eligible, whether or not both parents are employed, although
there are not always enough spaces available for children under age 3.
Most children attend all day, but parents have the option of sending them
only part time. These preschools are popular and highly regarded, although
there are often as many as 25 to 30 children per class with only one teach-
er, a ratio generally regarded as too high in the United States (Hayes et al.,
1990).
Similar though often less extensive programs are operated under the
auspices of the education systems in most European countries. In Denmark,
Finland, and Sweden, however, child care is offered as part of social wel-
fare. Because it is widely believed that Sweden has very high-quality child
care centers (Kamerman, 1988), its approach deserves special attention.
As many as 73 percent of preschool-age children receive out-of-home
care in Sweden. About 13 percent of children are in private day care be-
cause not enough places are available in the heavily subsidized municipal
centers, where preference is given to children of working parents, single
mothers, and immigrants. Parents pay income-related fees even in the mu-
nicipal centers, typically 10 percent of wages (Kamerman and Kahn, 1981~.
Standards are set by the national government, but costs, which are high, are
borne by the municipalities. The groups are small, with a high ratio of staff
to children, and the facilities are excellent. There are plans for the further
expansion of day care programs so that by the early l990s all children older
than 18 months would be guaranteed a place. Since by then parental leaves
are supposed to be extended to 18 months, the goal clearly is to provide
quality care for all children until they enter school.
Nonetheless, in Sweden as elsewhere, there is much less organized care
available for children between ages 1 and 3 than for older children, and
existing programs are aimed mainly at families with working parents. Care
for toddlers is provided in a wide variety of ways, including, in some cases,
subsidies for in-home care, for cooperative arrangements among families,
and for family day care homes, as well as some provision of infant care
centers or creches. Generally this care is not free or even heavily subsi-
dized. Thus, parents tend to have the main responsibility for this early
period of children's lives, and care of infants by their own parents is en-
couraged by the availability of leaves and part-time options.
Less attention has been paid to the needs of school-age children when
parents' work hours are longer than school hours, or at times when school is
OCR for page 170
170
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
not in session (Moss, 1988~. There is, however, growing recognition that
parents need to be able to take leave in case of children's illness. The most
generous provisions are in Sweden, where parents receive 90 percent of
their customary wages for up to 60 days per year when children up to age
10 or their caretakers are ill: wage replacement is through the social insur-
ance system (Stoiber, 1989~. In the EEC countries, entitlement is for 5 days
per child per year, although some collective bargaining agreements pro-
vide far more than this minimum. Beyond explicit arrangements for care of
sick family members, workers are likely to take advantage of relatively
generous vacations and perhaps leaves intended for other purposes when
needs arise such as care for children, elderly parents, or other family mem-
bers.
The existing programs, financed out of public funds, are expensive, but
there are substantially reduced direct costs to parents and few direct costs
to employers. It must be emphasized that the indirect costs are shared by
all employers and employees through the tax system and that tax rates
are considerably higher in Western Europe than in the United States.
ECONOMIC PERFORMANCE AND QUALITY OF LIFE
The various programs discussed in this chapter help workers with family
commitments to do justice to both sets of responsibilities. They also entail
costs, which may include increased taxes, higher prices, higher unemploy-
ment, lower wages, or smaller profits. Thurow (1989) suggests that higher
compensation for workers in the service sector in Europe than in the United
States has led to greater investment in advanced technology, hence higher
productivity and fewer service-sector jobs in Europe. Existing data are not
remotely adequate to reliably measure the direct and indirect benefits or
costs associated with these programs. However, to the extent we can, it is
useful to briefly examine the economic performance and the quality of life
attained in the most economically advanced countries of Western Europe
and Canada, countries that have relatively generous provisions in some or
all of these respects, compared with those in the United States. There is no
evidence that either good or bad economic performance is directly linked to
the particular programs considered here; many other factors are inevitably
involved. It is reasonable to suggest, however, that the programs are at
least not incompatible with a creditable economic performance.
Examining the limited information available is particularly important be-
cause it is often suggested that extensive nonwage benefits and family-
oriented policies will have serious detrimental effects on the economy.
Opponents of legally required benefits assert that flexibility is the key for
businesses facing pressure from international competition and that the free
market approach has encouraged job creation, economic growth, and entre
OCR for page 171
FAMILY-ORIENTED PROGRAMS IN OTHER CO UNTRIES
171
preneurial activity (U.S. Chamber of Commerce, 1987~. They further claim
that mandated benefits would force companies to decrease output, go out of
business or increase prices (Walker, 1988~. Recent high unemployment
rates in most European countries are generally cited as supporting evidence.
Economic Performance
Our assessment of economic performance is based on about 25 years'
data, a period during which many of the current programs have been in
existence. A quarter-century is long enough to avoid undue influence by
random short-term disturbances. Table 7-6 shows a long-term perspective
on expenditures of the central governments of 13 advanced industrialized
countries. Between 1960 and 1987, they amounted to 32 percent of GDP in
the United States, compared with an average of 41 percent for the other
countries. Only in Switzerland was the proportion lower than in the United
TABLE 7-6 Central Government Average Annual Expenditures in 13
Industrialized Countries, 1960-1987, and Net National Debt, 1988
Total Outlays of
Government as a
Percentage of
Gross Domestic Current Surplus/ Net National
Product Receipts Deficit Debt, 1988
Belgium 42.2 37.7 -4.5124.5
Canada 37.1 33.8 -3.339.0
Denmark 44.3 43.7 -0.624.2
Federal Republic
of Germany 42.6 41.1 -1.523.5
Finland 34.3 35.5 1.2-0.2
France 42.7 40.9 -1.825.5
Italy 39.8 32.8 -7.092.4
Netherlands 48.9 45.8 -3.155.9
Norway 42.5 46.0 3.5-25.3
Sweden 49.3 49.5 0.27.2
Switzerland 25.0 29.2 4.2
United Kingdom 41.0 37.6 -3.438.4
United States 32.0 29.1 2.930.6
Average, excluding
United States 40.8 39.4 -1.336.8
SOURCE: Expenditures and receipts: Organisation for Economic Cooperation and Devel-
opment (1989c:Tables 6.5, and 6.6); column 3 is calculated from columns 1 and 2; public debt:
Organisation for Economic Cooperation and Development (1989a:Table 34).
OCR for page 172
72
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
States. Also, the net national debt (total federal debt minus the amount
held in federal government accounts) in 1988 was 31 percent of GDP in
the United States and an average of 37 percent in the other countries. At
the same time, the annual U.S. deficit of 2.9 percent of GDP has been
substantially larger than the average of 1.3 percent in the other countries. It
should be noted, however, that there is a wide range among the latter and
the United States ranks sixth among the 13 countries.
Table 7-7 shows several of the most generally accepted indicators of
economic performance, frequently used when economists attempt to com-
pare the success of economic systems (Gardner, 1988; Schnitzer and Nor-
dyke, 1983~. The first of these is per capita GDP, widely regarded as the
best single measure of: economic success; estimates, however, tend to be
unreliable. Apart from the general problems of unreliable valuation of gov-
ernment services and of the output of the informal sector of the economy,
there are additional difficulties when all data have to be expressed in terms
of a common currency in order to make comparisons possible. Moreover,
there are substantial differences depending on which measure is used:
gross national product (GNP) is the value of new goods and services pro-
duced by domestic factors of production, and gross domestic product
(GDP) is the value of new goods and services produced within the country.
Thus, for instance, the United States ranks second in GNP per capita, be-
hind Switzerland (International Bank for Reconstruction and Development,
1988), but fifth in GDP per capita, as shown in the table.
Other indicators are also of some interest. The United States had a higher
level of unemployment than any of the other countries except Canada and
Italy between 1960 and 1987, but it has been about average in this respect
between 1980 and 1987. The United States has done even better in terms of
job creation, in part related to its large population increase. The United
States ranked tenth in growth of hourly earnings in manufacturing. The
annual rate of inflation between 1960 and 1987 in the United States of 5.1
percent compares very favorably with the average of 6.4 percent in the
other countries. Because opponents of more generous social welfare pro-
grams tend to emphasize the importance of international competitiveness,
it is particularly noteworthy that the United States had a less favorable
balance of trade than all but two of the other countries.
Quality of Life
Quality of life is even more difficult to gauge than economic perfor-
mance; nonetheless, it is instructive to look at some widely used indicators.
Table 7-8 provides ownership data for three items that are likely to be
representative of consumer durables in general, as well as data on hours
worked per week. As the table shows, the United States ranks high in
OCR for page 173
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OCR for page 174
174
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
TABLE 7-8 Selected Indices of Quality of Life: Hours Worked and
Ownership of Consumer Durables
-
Hours of Work Number per 1 000 Inhabitants:
per Week In '
Manufacturing, Cars, Telephones, TV Sets,
Country 1988 1985 1986 1986
Belgium 33.0 335 (1984) 461 301
Canada 38.0 421 (1982) 769 546
Denmark 32.5 293 818 386
F.R. Germany 40.1 441 (1986) 640 379
Finland 32.2 329 (1986) 617 480
France 38.7 369 (1986) 608 402
Italy 40.1 355 469 255
Netherlands 37.2 341 621 467
Norway 37.2 382 (1986) 622 348
Sweden 38.4 377 890 393
Switzerland 42.4 402 856 411
U.K. 42.2 312 (1983) 524 534
U.S. 41.0 473 (1984) 760 813
Average,
excluding U.S. 37.7 361 658 409
NOTE: Year in parentheses denotes that of most recent data available.
SOURCES: Hours of work, International Labour Organisation (1988); cars, Organisation
for Economic Cooperation and Development (1989b); telephones, TV sets, Bureau of the
Census (1989f).
Ownership of consumer durables, especially automobiles and TV sets. The
relatively high level of per capita income no doubt largely accounts for
this. Hours of leisure time is another aspect of quality of life. As noted
above, the United States has a longer work week than 10 of the other
countries. And long hours are generally viewed as a burden, particularly
by workers with dual responsibilities.
Great emphasis has been placed above on the level of per capita income
and how it has changed over time, because income is crucial in determin-
ing the well-being of a population. The distribution of income plays an
important part as well, particularly in determining quality of life. Table 7-9
shows that the share of income going to the top 20 percent is about the same
in the United States as in the other nations, but the U.S. share of the lowest
20 percent of workers is very small: 5.3 percent of income, about one-fifth
less than the average of 6.6 percent for the other countries. Although the
greater degree of inequality may be related to the regional variations to be
expected in a large country, it is not clear that this accounts for all of the
difference.
OCR for page 175
FAMILY-ORIENTED PROGRAMS IN OTHER COUNTRIES
TABLE 7-9 Income Distribution by Quintiles, OECD Countries,
1975-1982
175
Income Distribution by Quintiles
Country Year I II III IV V
Belgium 1978- 1979 7.9 13.7 18.6 23.8 35.0
Canada 1981 5.3 11.8 18.0 24.9 40.0
Denmark 1981 5.4 12.0 18.4 25.6 38.6
Finland 1981 6.3 12.1 18.4 25.5 37.6
France 1975 5.5 11.5 17.1 23.7 42.2
F.R. Germany 1978 7.9 12.5 17.0 23.1 39.5
Italy 1977 6.2 11.3 15.9 22.7 43.9
Netherlands 1981 8.3 14.1 18.2 23.2 36.2
Norway 1982 6.0 12.9 18.3 24.6 38.2
Sweden 1981 7.4 13.1 16.8 21.0 41.7
Switzerland 1978 6.6 13.5 18.5 23.4 38.0
U.K. 1979 7.0 11.5 17.0 24.8 39.7
U.S. 1980 5.3 11.9 17.9 25.0 39.9
Average,
excluding U.S. 6.6 12.5 17.7 23.9 39.3
NOTE: Data are for the most recent year available.
SOURCE: International Bank for Reconstruction and Development (1988).
Other particularly important indicators of quality of life are measures of
survival chances, which are not only important themselves, but are also
often viewed as closely linked to level of health and general well-being
(Kynch and Sen, 19831. Expenditures on health care in the United States
were almost 12 percent of GNP in 1989, a larger share than in any of the
other countries, which spend an average of under 8 percent (Meyer and
Moon, 1988J. The United States does well with respect to maternal mortal-
ity, but this is related to the fact that mortality rates are far lower for
younger mothers (U.S. National Center for Health Statistics, 1984), and the
proportion of women over age 30 giving birth is considerably lower in the
United States than for most of the other countries (United Nations, 19861.
Infant mortality is higher in the United States than in any of the other
countries, almost twice as high as in Sweden and Switzerland. Life expect-
ancy is lower than in eight of the other countries, although the differences
are small (Table 7-10~.
On balance, it would be difficult to conclude that the quality of life in the
United States is as high as one would expect from the relatively high per
capita income and large expenditures on health care, although this sketchy
evidence is no more than suggestive. One way of summing up the situation
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176
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
in the United States compared with other countries is to say that there are
trade-offs: people tend to have a higher standard of living on average, but
the poor fare considerably worse; workers have higher earnings but less
free time; and people pay lower taxes but receive fewer government ben-
efits.
Opinion is divided as to whether, over the long term, the substantially
greater worker benefits ire other countries, in significant part paid for by the
government, tend to inhibit the achievement of a healthy economy. The
data reviewed here suggest that economies are not inhibited by generous
worker benefits. As for the poorer performance of the European countries
in the late 1980s, it is not clear that this shift can be ascribed to differences
in social policy that have existed for a far longer time. The long-term
record is consistent with the view that generous social programs have not
resulted in an inferior economic performance in the Western European
countries compared with the United States. On the contrary, European na-
tions appear to be catching up. In terms of quality of life, the nations of
TABLE 7-10 Indices of Quality of Life: Health Outcomes
Infant Maternal
Life Mortality Mortality Suicides
Expectancy (per 1,000) (per 100,000) (per 100,000)
Country 1988 1988 1980 1986
Belgium 75.4 8 8.3 22.7 (1984)
Canada 77.1 7 5.0 12.8 (1985)
Denmark 75.3 7 5.8 26.9 (1985)
F.R. Germany 75.8 8 17.2 17.0
Finland n.a. ma 4.8 26.3
France 75.7 9 14.7 21.8 (1985)
Italy 76.7 8 15.2 7.3 (1983)
Netherlands 77.1 8 7.8 11.2 (1985)
Norway n.a. n.a 6.7 14.2 (1985)
Sweden 77.3 6 5.2 17.2 (1985)
Switzerland 78.0 6 7.8 (1980) 21.4
U.K. 75.1 9 10.3 9.7
U.S. 75.3 11 9~5 12.4 (1984)
Average,
excluding U.S. 76.3 8 9.0 17.4
NOTE: Year in parentheses denotes that of most recent data available.
n.a., not available.
SOURCES: Life expectancy, infant mortality, suicides, Bureau of the Census (1989f);
maternal mortality, United Nations (1986).
OCR for page 177
FAMILY-ORIENTED PROGRAMS IN OTHER CO UNTRIES
177
Western Europe are in many respects equal to and in some respects exceed
the United States.
It is worth noting that a number of researchers view the performance of
the other countries rather more favorably than we do. For instance, Cameron
(1982) concluded that European countries had been more successful in en-
hancing the functioning of the capitalist system. Wilensky (1983) also points
out that their good performance after the oil shock of 1973-1974 is particu-
larly impressive in view of the dependence of many of them on oil imports.
These evaluations, however, were based on data up to 1980, and the U.S.
performance compares more favorably since then.
CONCLUSIONS
The United States has historically offered fewer social welfare programs
than many Western European countries. Employees in Western Europe have
more holidays and vacation days, and flextime is more prevalent than in the
United States. Most of the countries provide family allowances and exten-
sive family leave, as well as more publicly subsidized child care systems.
More leave for parents and more child care services are provided in West-
ern Europe, and coverage is far more likely to be universal, rather than
restricted to particular employees and their dependents. Even so, provi-
sions for child care are very uneven, and nowhere is good, affordable care
available for all children from infancy on. Moreover, evidence suggests
that differential use of parental leave by women may diminish employ-
ment and promotion opportunities.
Employee benefits, including vacations and leaves, are generally estab-
lished by law in Europe and account for a somewhat larger share of labor
costs there than in the United States. Government expenditures on related
employee benefit programs are much higher than in the United States,
which contributes to a considerably higher tax burden for individuals and
businesses. An assessment of economic performance measures finds that
the United States ranks more favorably than most of the European coun-
tries on per capita GDP, inflation, job creation, and very recently on unem-
ployment, but less favorably on central government deficit, growth in hourly
earnings, and balance of trade. On selected quality-of-life indicators, people
in the United States have more consumer goods but longer work hours. The
United States fares well on maternal mortality but very poorly on infant
mortality and very slightly so on life expectancy.
While cross-cultural comparisons must be made with caution, the exten-
sive social programs provided by governments in Western Europe, includ-
ing child care and parental leave, and the heavy tax burden they impose on
employers and individuals appear to be compatible with vigorous and grow-
ing economies. In terms of the standard of living, Western European coun
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178
WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE
tries have been catching up with the United States and in some respects
have even overtaken it. This conclusion does not imply that blind imitation
of their approach is wise; it does suggest that there are models for the
successful combination of higher levels of investment in programs support-
ing working families and healthy and vigorous private enterprise econo-
mies.
Representative terms from entire chapter:
western europe
