IZA World of Labor

Demography, family, and gender

Population characteristics strongly predict labor market success. One of the biggest economic changes has been the rise of women in the labor market. The upcoming demographic imbalances suggest substantial adjustment processes on labor markets around the globe. Empirical evidence relating social, cultural, and biological processes to worker well-being is also provided.

  • How effective is compulsory schooling as a policy instrument?

    Changes in compulsory schooling laws have significant effects on certain population groups, but are costly to implement

    Colm P. Harmon, March 2017
    Compulsory schooling laws are a common policy tool to achieve greater participation in education, particularly from marginalized groups. Raising the compulsory schooling requirement forces students to remain in school which, on balance, is good for them in terms of labor market outcomes such as earnings. But the usefulness of this approach rests with how the laws affect the distribution of years of schooling, and the wider benefits of the increase in schooling. There is also evidence that such a policy has an intergenerational impact, which can help address persistence in poverty across generations.
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  • Female poverty and intrahousehold inequality in transition economies

    An unequal distribution of resources within the family is a special concern for female poverty

    Luca Piccoli, March 2017
    Transition to a market economy is accompanied by a period of greater economic uncertainty. Women are likely to suffer substantial disadvantages from this uncertainty compared to men as they are, for example, more likely to lose their job. This not only implies a monetary loss for the entire family, but also degrades female bargaining power within the household, possibly further aggravating their well-being. When intra-household inequality—an unequal distribution of resources among family members—exists, female poverty might be significantly larger than what can be deduced using standard household based poverty measures.
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  • How does grandparent childcare affect labor supply?

    Childcare provided by grandparents helps young working mothers, but reduces the labor supply of older women

    Giulio Zanella, March 2017
    Older people in developed countries are living longer and healthier lives. A prolonged and healthy mature period of life is often associated with continued and active participation in the labor market. At the same time, active grandparents can offer their working offspring a free, flexible, and reliable source of childcare. However, while grandparent-provided childcare helps young parents (especially young mothers) overcome the negative effects of child rearing on their labor market participation, it can sometimes conflict with the objective of providing additional income through employment for older workers, most notably older women.
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  • Does religiosity explain economic outcomes?

    Understanding religiosity is crucial to informed policy making

    Olga Popova, February 2017
    Most religions in transition economies were marginalized by their former communist regimes. Today, some of these countries are experiencing a revival of religiosity, while others are prone to secularization. Religious norms affect individual decision making with respect to human capital investment, economic reforms, marital stability, employment, and other contexts. This implies that the interests of both religious and non-religious communities may differ and must be taken into account when designing and implementing economic policies, which is a challenge for policymakers.
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  • The economics of mental health

    With modern psychological therapy, mentally ill people can become more productive and more satisfied with life

    Richard Layard, January 2017
    In a typical country, one in five people suffers from a mental illness, the great majority from depression or crippling anxiety. Mental illness accounts for half of all illness up to age 45 in rich countries, making it the most prevalent disease among working-age people; it also accounts for close to half of disability benefits in many countries. Mentally ill people are less likely to be employed and, if employed, more likely to be out sick or working below par. If mentally ill people received treatment so that they had the same employment rate as the rest of the population, total employment would be 4% higher, adding many billions to national output.
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  • Gender differences in wages and leadership

    Gender gaps in wages and leadership positions are large—Why, and what can be done about it?

    Mario Macis, January 2017
    Gender wage gaps and women’s underrepresentation in leadership positions exist at remarkably similar magnitudes across countries at all levels of income per capita. Women’s educational attainment and labor market participation have improved, but this has been insufficient to close the gaps. A combination of economic forces, cultural and social norms, discrimination, and unequal legal rights appear to be contributing to gender inequality. A range of policy options (such as quotas) have been implemented in some countries; some have been successful, whereas for others the effects are still unclear.
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  • Childcare expansion and mothers’ employment in post-socialist countries

    A range of other policies and changes are needed for childcare expansion to increase mothers’ labor supply

    Anna Lovász, December 2016
    In 2002, the EU set targets for expanding childcare coverage, but most of the post-socialist countries are behind schedule. While childcare expansion places a heavy financial burden on governments, low participation in the labor force by mothers, especially those with children under the age of three, implies a high potential impact. However, the effectiveness of childcare expansion may be limited by some common characteristics of these countries: family policies that do not support women’s labor market re-entry, few flexible work opportunities, and cultural norms about family and gender roles shaped by the institutional and economic legacy of socialism.
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  • Privatizing sick pay: Does it work?

    Employer provision of sickness/disability benefits reduces take-up but may also have unintended effects

    Pierre Koning, December 2016
    Public schemes for sickness benefits and disability insurance are often criticized for the lack of incentive they provide for preventive and reintegration activities by employers. To stimulate the interest of employers in engaging with these schemes, several modes of privatization could be considered, including the provision of sickness benefits by employers, “experience rating” of disability insurance costs, employer self-insurance, or insurance by private insurance providers. These types of employer incentives seem to lower sickness rates, but they also come at the risk of increased under-reporting and less employment opportunities for workers with disabilities or bad health conditions. Policymakers should be aware of this trade-off.
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  • Gender wage discrimination

    Does the extent of competition in labor markets explain why female workers are paid less than men?

    Boris Hirsch, November 2016
    There are pronounced and persistent wage differences between men and women in all parts of the world. A significant element of these wage disparities can be attributed to differences in worker and workplace characteristics, which are likely to mirror differences in worker productivity. However, a large part of these differences remains unexplained, and it is common to attribute them to discrimination by the employer that is rooted in prejudice against female workers. Yet recent empirical evidence suggests that, to a large extent, the gaps reflect “monopsonistic” wage discrimination—that is, employers exploiting their wage-setting power over women—rather than any sort of prejudice.
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  • Can universal preschool increase the labor supply of mothers?

    The success of universal preschool education depends crucially on the policy parameters and specific country context

    Sarah Cattan, November 2016
    Since the 1970s, many countries have established free or highly subsidized education for all preschool children in the hope of improving children’s learning and socio-economic life chances and encouraging mothers to join the labor force. Evaluations reveal that these policies can increase maternal employment in the short term and may continue to do so even after the child is no longer in preschool by enabling mothers to gain more job skills and increase their attachment to the labor force. However, their effectiveness depends on the policy design, the country context, and the characteristics of mothers of preschoolers.
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