Abstract
This chapter examines the macro-level within which reproductive decisions are made in OECD countries. It establishes different institutional settings by looking at three core components or levers of family policies which can have an important effect on childbearing preferences: financial transfers to supplement family income, leave entitlements to enable working parents to care for their child(ren) and the provision of child-care services. It assesses differences in their key characteristics as well as the extent to which a combination of these forms of support may influence fertility behaviour. Three main issues are considered. To examine how policy support for families has evolved over recent decades, key characteristics of support at different points in time are compared. Differences in policy support for specific types of families (one-earner or two-earner couples, different numbers of children) are compared. Finally, the combination of resources in terms of time, money and services available to parents over the life course of a child is used to consider whether policy packages are sufficient to secure the environment needed to start family formation or to enlarge the family. The main source of data is the OECD Family Database. The results indicate that complementary combinations of support in time, cash and services to foster work-life balance and continuity of this support over childhood are key parameters for policy effectiveness.
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Notes
- 1.
- 2.
Expenditure includes child payments and allowances, parental leave benefits and child-care support. Spending on health and housing support also assists families, but is not included here. No data on tax breaks for Estonia, Greece, Hungary and Slovenia. Tax breaks are not used in Denmark, Finland, Iceland, Italy, Luxembourg and Sweden. Coverage of spendings on families may be limited as such services are often provided and/or co-financed by local governments. This leads to large gaps in the measurement of spending in Canada and Switzerland. Local governments also play a key role in financing child care. This can make it difficult to get an accurate view of public support for child care across a country, especially but not exclusively in those with a federal structure.
- 3.
Figure 2.6 illustrates one particular case, but transfers and their consequences on effective tax rates vary with income level and the number and age of children (OECD Family database, PF1.4). Germany is the only country where the tax/benefit system significantly favours single breadwinner couples over dual-earner families, at both levels of earnings, and particularly at higher earnings. This is due to the fact that in Germany social security contributions are capped in such a manner that a couple family with two adults who earn an average wage pays about EUR 7,000 more in social security contributions than a couple family with a single breadwinner who earns twice the average wage. Similar effects exist in the tax/benefit systems of France, Iceland and the Slovak Republic, but at this earnings level the effect of the caps is comparatively small. Moreover, it is lowered by the individual nature of the tax systems in Iceland and the Slovak Republic.
- 4.
In Australia, paid leave was introduced on 1 January 2011.
- 5.
More precisely, the relative tax rate of the second earner is indicated by the ratio of the marginal tax rate on the second earner to the tax wedge for a single-earner couple with two children and average earnings. This ratio represents the share of the earnings of the second earner which goes into paying additional household taxes.
- 6.
The standardised score for each criterion x is given by the formula (1- [Max (x) – x]/[Max (x) – Min (x)]2), which permits ranking countries by their score ranging from 0 to 1. The composite index is calculated by taking the weighted average of the score obtained for each dimension that counts for one quarter in the total index. It allows for a partial compensation between the different dimensions, which implies that a low score in one dimension can only be partially offset by a high score in another dimension.
- 7.
These incentives are estimated by the increase in the household’s disposable income for a couple with two children where husband and wife both earn an income (100 % and 33 % of average earnings, respectively) as compared with the situation, in which the entire household income is earned by the husband.
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Thévenon, O. (2015). Institutional Settings of Childbearing. In: Philipov, D., Liefbroer, A., Klobas, J. (eds) Reproductive Decision-Making in a Macro-Micro Perspective. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-9401-5_2
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