Lane Kenworthy, The Good Society
What do we want in work, family, and leisure? Preferences differ. Ordinary Americans want a good wage, benefits such as a pension and health insurance, enough hours, a predictable schedule, the ability to take time off if needed, six months or more with a newborn child, and good care for preschool children. Proponents of the “traditional” family believe it’s better for the family and children if there are two married adults, if one has a full-time paid job and the other stays home with the children, and if the one in paid work is a man and the one at home is a women. Feminists would like equal opportunity for women in jobs and pay and less gender inequality in housework and child care. Employers want committed workers, few absences from work (and no lengthy ones), scheduling flexibility, minimal benefits such as health insurance and pensions, and modest wages. Social democrats want a high employment rate, one-year paid parental leave (split between the two parents), high-quality affordable early education beginning at 12 months, and modest restrictions on employers apart from a high wage floor. Conservatives want few restrictions on employers, low taxes, and minimal government services and benefits.
What works best?
The United States is the only rich nation without a public sickness insurance program.1 Though many large private-sector firms offer employees some paid sickness days and five states (California, Hawaii, New Jersey, New York, and Rhode Island, along with Washington DC) have a public program, more than one in four employed Americans gets zero days of paid sick leave.2
Sweden’s approach offers a good model.3 A person with illness, disease, or injury that causes her to miss work receives 80% of her pay. The amount of the benefit is capped at about $28,000 per year.4 The benefit is taxed as ordinary income. Day 1 isn’t reimbursed. Days 2 through 14 are paid by the employer, and after that the money comes from a public sickness insurance fund. Self-employed persons are paid from the public fund. The payments can last up to a year (longer for a serious disease). A certificate from a doctor is required after seven days and a detailed medical exam after one month. Eligibility begins after three months of employment for sickness and disease and immediately for workplace injury.
We need not begin with a program as generous as Sweden’s, which has typically cost about 1.5% of GDP. A program spending about a third of that amount, 0.5% of GDP, would be a good start.
CHILDREN AGE 0 TO 1
A 1993 law, the Family and Medical Leave Act, gives American employees the right to 12 weeks of job-protected leave for the birth of a child or to care for a sick relative. But this only applies to companies with 50 or more employees. And there is no requirement that the leave be paid. Only 14% of workers have employer-provided paid family leave.5 Consequently, many Americans in middle- and low-income households take little time off. That’s unfortunate, because outcomes for children tend to be best when they are with their parent(s) during the first year of life.6
In Sweden, parents of a newborn child have 13 months of job-protected paid leave, with the benefit level set at approximately 80% of earnings. Two of those months are “use it or lose it” for the father; if he doesn’t use them, the couple gets 11 months instead of 13. In addition, parents can take four months off per year to care for a sick child up to age 12, paid at the same level as parental leave.7 As figure 1 shows, Sweden’s policy is a generous one, but not exceptionally so by the standards of other rich nations.
The United States is the only affluent democratic country without a paid parental leave program. A few states — California, New Jersey, New York, and Rhode Island — along with Washington DC have enacted small-scale programs. Results from California’s, which has been in place since 2004, are encouraging.8
A new federal parental leave program for the US should provide a minimum of six months of paid leave per child, with an incentive for the father to take a portion of the leave. The leave should be job-protected. The replacement rate should be at least 50%. All workers meeting minimum work history requirements, including those in small firms and self-employed persons, should be eligible.9
Sweden’s policy costs about 0.75% of GDP per year, as figure 2 indicates. With a slightly less generous version and our larger per capita GDP, an American counterpart might cost around 0.5% a year.10
CHILDREN AGE 1 TO 4
Americans used to worry about mothers of young children working outside the home. In the late 1970s, 68% believed “a preschool child is likely to suffer if his or her mother works.” But by 2018, the share had shrunk to 28%.11 Indeed, nowadays support for paid work among mothers of young kids spans the political spectrum: many conservatives favor strict time limits on receipt of government benefits in order to encourage mothers’ employment, and gender egalitarians point out that four or five years out of the work force (more if there is a second or third child) puts women at a severe disadvantage for later employment and earnings.12
But while many Americans with prekindergarten children want to combine family with paid work, out-of-home care can be prohibitively expensive. American parents with a child younger than age five in out-of-home care currently pay, on average, about $9,000 per year for that care. For families with incomes below $18,000 who pay for out-of-home care, the average cost amounts to 40% of household income. For those with incomes between $18,000 and $36,000, the average is 20% of income.13
Faced with such high costs, some parents settle for care that is mediocre or poor. A majority of out-of-home care is unregulated and unlicensed, and for infants and toddlers about two-thirds is. Most is judged to be of moderate or low quality.14 Other parents simply forgo employment. Among mothers whose youngest child is six to sixteen years old, and thus eligible for free K-12 schooling, the employment rate in the US is just a few percentage points lower than in Denmark and Sweden. Among mothers with a child younger than six, it’s 15 percentage points lower.15
A good early education system will combine three features: accessibility, affordability, and quality. For Americans able and willing to pay a lot for childcare, our current market-based system typically delivers all three. But for those with low to moderate incomes, getting access to affordable care often means sacrificing quality. A universal system with public funding and some direct public provision could change this, ensuring good-quality care to everyone at an affordable price.
Government already pays for some early education: the federal government funds Head Start, subsidizes childcare for some poor families via the Child Care and Development Fund (CCDF), allows a tax break for childcare, and funds some special education services; and some state and city governments offer preschool for four-year-olds. Yet current funding is nowhere near sufficient to ensure that everyone has access to good-quality child care and preschool. Among three-year-olds, for instance, about 20% are covered by existing funding: state preschools enroll 5%, Head Start enrolls 10%, and the CCDF subsidizes care for another 5%. The shares are even smaller for children aged one and two.16
Overall, public spending on early education is quite low in the US, as figure 3 shows. The same is true of children’s participation in early education, shown in figure 4.
How much would a good early education system cost? The bill to taxpayers will depend on specific details, but a rough estimate is 1% of GDP, or $180 billion, per year.17 There are two ways to reach this number. First, suppose 75% of children aged one to four enroll in early education. That’s 12 million children. If we spend $12,500 per child, the same as for K-12 schools,18 total expenditures would be around $150 billion. We’ll want the teacher-child ratio for early education to be better than for K-12, which will increase the cost a bit.19 Second, public expenditure on early education in Denmark and Sweden is about 1.5% of GDP.20 We’re likely to end up with more private provision and we have a larger per capita GDP, so 1% of our GDP might well be sufficient to create a system that approximates theirs in quality and accessibility.
Some of the revenue needed to fund early education can come from user fees. Early education is different from police protection and health care, the kinds of services that almost no one opts to go without. Even if good early education programs were readily available, some families would choose not to use them because they prefer to provide stay-at-home parental care for their young children. And of course some American adults have no children. This argues for having parents who do want to use early education pay something — even parents with low incomes. Here too the Nordic approach is sensible; in Denmark and Sweden programs charge on a sliding scale, with the fee rising in proportion to family income but capped at 10%.
Why not just give the money to parents and let them choose whether to use it on early education or on something else? The argument against doing so is that if early education has individual and social benefits, it makes sense to require that the money be used for that and only that. The same is true of safety (military, police), infrastructure (roads, bridges), health insurance (Medicare, Medicaid), and K-12 schooling, among others. It’s worth emphasizing that no one would be forced to enroll their children in early education; parents who prefer to stay home with their children during the first five years would still be able to do so.
Over the past 150 years, our productivity has increased dramatically. As figure 5 shows, this has enabled a sizable reduction in the amount of time a typical person spends in paid work.
Yet working time has decreased less in the United States than in most other affluent democratic nations, as we see in figure 6.
One reason why average working time in the US is comparatively high is that quite a few of us work long hours. Figure 7 shows that about 12% of employed Americans typically work 50 or more hours per week, a larger share than in many other rich nations. This owes partly to employer demands and partly to a culture of “putting in the time” on the job.21
More important is the fact that Americans have fewer paid vacation days and holidays than their counterparts abroad. In other rich democratic countries, the law requires that employees have between 10 and 38 paid vacation days and holidays. The average in these nations is 27 days.22 In the United States, the number is zero, as we see in figure 8. Most public employees get some paid days off, and 77% of private-sector employers offer some to their workers. Yet some employees get none, and the average number of paid days off for those who get any is just 18.23
A reasonable starting point for US policy would be 10 paid holidays and 15 days of paid vacation, for a total of 25. Farther-reaching proposals include a 35-hour standard work week (rather than 40) and periodic paid sabbaticals during one’s work career.
Americans also spend a good bit of time getting to and from work. Commute time has increased steadily since the 1970s, and it now averages 50 minutes per day.24
American employers increasingly utilize “just-in-time” scheduling, whereby employees have varying work days and hours and are given little advance notice of their schedule. A recent study found, for instance, that retail firms typically inform workers of their work schedule three to 14 days in advance. This flexibility allows the firm to minimize its labor costs without shortchanging customer service. But it can be hard on workers.
It is possible to mandate better scheduling practices by employers. In Germany, retail employers are required to notify employees of their schedule 16 weeks in advance. In Denmark the requirement is 26 weeks. A number of European nations firms must provide a guaranteed minimum number of hours to their workers.25
Most adults are in paid work. Many have children. All of us want some sort of life beyond our job. The situation in the contemporary United States is far from ideal. Many employees lack sickness insurance. Many don’t have access to paid parental leave and to good-quality child care and preschool for their kids, and this contributes to a lower employment rate for mothers in the United States and a larger gap in happiness between nonparents and parents.26 Employed Americans also work longer hours than their counterparts in most other rich democratic nations. And for some, the growing flexibility of employment and scheduling is drawback rather than a benefit.
We can do better. A number of other affluent democratic countries already do.
- Jody Heymann, Hye Jin Rho, John Schmitt, and Alison Earle, “Contagion Nation: A Comparison of Paid Sick Day Policies in 22 Countries,” Center for Economic Development Research, 2009; Lane Kenworthy, “Social Programs,” The Good Society. ↩
- US Bureau of Labor Statistics, “Employee Benefits in the United States,” 2017, table 6 (“Selected Paid Leave Benefits”), using data from the National Compensation Survey. ↩
- Swedish Ministry of Health and Social Affairs, “Social Insurance in Sweden,” 2016; US Social Security Administration, “Social Security Programs Throughout the World: Europe, 2016,” 2016. ↩
- 706 Swedish kroner per day. This cap is indexed to inflation. ↩
- US Department of Labor, “National Compensation Survey: Employee Benefits in the United States, March 2016,” Bulletin 2785, 2016, table 32. ↩
- Jane Waldfogel, What Children Need, Harvard University Press, 2006, ch. 2; Jeanne Brooks-Gunn, Wen-Jui Han, and Jane Waldfogel, “First-Year Maternal Employment and Child Development in the First Seven Years,” Monographs of the Society for Research in Child Development, 2010; Maria del Carmen Huerta et al, “Early Maternal Employment and Child Development in Five OECD Countries,” OECD Social, Employment, and Migration Working Paper 118, 2011; AEI-Brookings Working Group on Paid Family Leave, “Paid Family and Medical Leave: An Issue Whose Time Has Come,” 2017. ↩
- Tommy Ferrarini and Ann-Zofie Duvander, “Earner-Carer Model at the Cross-Roads: Reforms and Outcomes of Sweden’s Family policy in Comparative Perspective,” International Journal of Health Services, 2010; Swedish Ministry of Health and Social Affairs, “Social Insurance in Sweden,” 2016; US Social Security Administration, “Social Security Programs Throughout the World: Europe, 2016,” 2016. ↩
- Maya Rossin-Slater, Christopher J. Ruhm, and Jane Waldfogel, “The Effects of California’s Paid Family Leave Program on Mothers’ Leave-Taking and Subsequent Labor Market Outcomes,” Journal of Public Policy Analysis and Management, 2013. ↩
- For a sample proposal, see Christopher J. Ruhm, “A National Paid Parental Leave Policy for the United States,” in The 51%: Driving Growth through Women’s Economic Participation, edited by Diane Whitmore Schanzenbach and Ryan Nunn, Brookings Institution, 2017. ↩
- According to one estimate, a program with six months of leave and a replacement rate of 66% would cost about 0.5% of GDP. AEI-Brookings Working Group on Paid Family Leave, “Paid Family and Medical Leave: An Issue Whose Time Has Come,” p. 25. ↩
- General Social Survey, series fepresch. ↩
- Ron Haskins, Work Over Welfare, Brookings Institution Press, 2007; Janet C. Gornick, Marcia K. Meyers, et al, Gender Equality, Verso, 2009. ↩
- Ajay Chaudry et al, “Child Care Choices of Low-Income Working Families,” Urban Institute, 2011; ChildCare Aware of America, “Parents and the High Cost of Child Care,” 2012; Lynda Laughlin, “Who’s Minding the Kids? Child Care Arrangements: Spring 2011,” US Census Bureau, 2013, table 6, using data from the Survey of Income and Program Participation (SIPP); Brigid Schulte and Alieza Durana, “The New America Care Report,” New America Foundation, 2016. ↩
- Laughlin, “Who’s Minding the Kids?”; Erik Ruzek, Margaret Burchinal, George Farkas, and Greg J. Duncan, “The Quality of Toddler Child Care and Cognitive Skills at 24 Months: Propensity Score Analysis Results from the ECLS-B,” Early Childhood Research Quarterly, 2014. See also Deborah Lowe Vandell and Barbara Wolfe, “Child Care Quality: Does It Matter and Does It Need to Be Improved?” Special Report 78, Institute for Research on Poverty, University of Wisconsin-Madison, 2000; Jane Waldfogel, What Children Need, Harvard University Press, 2006; W. Steven Barnett et al, The State of Preschool 2012, National Institute for Early Education Research; Jonathan Cohn, “The Hell of American Day Care,” The New Republic, 2013. ↩
- OECD, Doing Better for Families, figure 1.9. For more comparative evidence, see Olivier Thévenon, “Drivers of Female Labor Force Participation in the OECD,” OECD Social, Employment, and Migration Working Papers No. 145, 2013; Claudia Olivetti and Barbara Petrongolo, “The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries,” Journal of Economic Perspectives, 2017. For Denmark-specific evidence, see Marianne Simonsen, “Availability and Price of High Quality Day Care and Female Employment,” Working Paper 2005-08, Department of Economics, University of Aarhus, 2005. In the United States, the labor force participation rate for mothers with a child age 6 to 17 is 75%. For mothers with a child under age 6, it’s only 65%. Bureau of Labor Statistics, “Employment Characteristics of Families,” using Current Population Survey data. For additional US-specific evidence, see Janice Compton and Robert A. Pollak, “Family Proximity, Childcare, and Women’s Labor Force Attachment,” Working Paper 17678, National Bureau of Economic Research, 2011; Elizabeth U. Cascio and Diane Whitmore Schanzenbach, “The Impacts of Expanding Access to High-Quality Preschool Education,” Working Paper 19735, National Bureau of Economic Research, 2013; Rasheed Malik, “The Effects of Universal Preschool in Washington, DC: Children’s Learning and Mothers’ Earnings,” Center on American Progress, 2018; Leah Ruppanner, Stephanie Moller, and Liana Sayer, “Expensive Childcare and Short School Days = Lower Maternal Employment and More Time in Childcare? Evidence from the American Time Use Survey,” Socius, 2019. Timothy Bartik concludes that the employment benefits of early education are not just in the quantity of jobs but also their quality. See Bartik, Investing in Kids: Early Childhood Programs and Local Economic Development, W.E. Upjohn Institute for Employment Research, 2011. ↩
- Cascio 2017b, table 1. ↩
- Timothy Bartik proposes an alternative that he estimates would cost half as much, or about 0.5% of GDP. It includes universal pre-K available to all four-year-olds, targeted full-time full-year childcare and pre-K available for all disadvantaged children from birth to age five, and targeted parenting services for first-time disadvantaged mothers and their children from the prenatal period until age two. See Bartik, 2011, ch. 7. Other proposals for smaller-scale programs include Obama Administration 2014 Budget Proposal; Brown et al 2013. ↩
- National Center for Education Statistics, “Expenditures.” ↩
- New York City and Boston each spend about $10,000 per child on their well-regarded public prekindergarten programs. David Kirp, “How New York Made Pre-K a Success,” New York Times, 2016. ↩
- Lane Kenworthy, “Early Education,” The Good Society. ↩
- Arlie Russell Hochschild, The Time Bind, Metropolitan Books, 1997. ↩
- Adewale Maye, “No Vacation Nation, Revised,” Center for Economic Policy and Research, 2019; Wikipedia, “List of Minimum Annual Leave by Country.” ↩
- Robert W. Van Giezen, “Paid Leave in Private Industry Over the Past 20 Years,” Bureau of Labor Statistics, 2013; Society for Human Resource Management, “2017 Holiday Schedules.” ↩
- Brian McKenzie and Melanie Rapino, “Commuting in the United States: 2009,” Census Bureau, 2011. ↩
- Francoise Carre and Chris Tilly, Where Bad Jobs Are Better: Retail Jobs Across Countries and Companies, Russell Sage Foundation, 2017, ch. 5. ↩
- Jennifer Glass, Matthew A. Andersson, and Robin W. Simon, “Parenthood and Happiness: Effects of Work-Family Reconciliation Policies in 22 OECD Countries,” American Journal of Sociology, 2016. ↩