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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

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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

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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).

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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,

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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

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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).

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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

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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

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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

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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.

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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

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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

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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

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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

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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).

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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

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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.

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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).

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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.