EXCERPTS:
I read two papers this week that shed light on the Great Work-Life Balance Debate we've been having on this blog and elsewhere in recent weeks.
The first, from a team of three Australian researchers, looks at the impact that the price of child care has on female labor force participation. The paper focuses on partnered women - because for single moms, working isn't optional - and assumes that their partners work full time. (More on that in a moment.)
Now historically, economists looking at this question have concluded that the more affordable and available child care gets, the more likely women are to stay in the workforce. Except in Australia - most studies of Australia have found little or no change in women's choices as child care prices rise. That seemed implausible to Robert Breunig, Xiaodong Gong, and Andrew King, so they decided to look at how these studies were calculating the price of child care.
It turns out previous economists were making a rookie mistake in how they measured price. They were adding up the national total spent on child care, and dividing it by the number of hours women worked to get the per hour cost of care. There are several problems with that approach.
First, it considers all child care to be of equal price, but as anyone who has babysat knows, taking care of an infant and a pre-teen are very different tasks and command different rates. Second, it doesn't differentiate between paying for care while Mom is at work and paying for care while Mom is at home. By including both forms of care in its ‘total spent' measure, this calculation overstates the cost of care relative to working hours. But most egregiously, researchers failed to see a measure of price derived from mothers' working hours can't be used to evaluate the impact of price on mothers' working hours. Of course the results they got made no sense.
Using a more accurate price measure - based on surveys of care providers - Breunig, Gong and King found a statistically significant (.29 percent) correlation between rises in child care price and declines in female employment and a .65 percent correlation with declines in hours worked. This fits perfectly with results from other OECD countries. More interestingly, this new study finds that rises in women's earnings correlate with more money spent on child care. In other words, the more women earn, the more likely they are to justify the cost of child care and stay in the workforce.
That last point is important because it relates to the second study I read this week, this one on Japan. The paper uses data on women's employment, earnings relative to men, and access to affordable child care to explore the causes of Japan's stagnant population growth.
Creina Day found that as women's income rises, families increasingly find it worthwhile to invest in child care so that both parents can continue working and the family can have more net income. But, as greater demand for child care pushes prices up, the fertility effect of rising wages is negated and women wind up making one of two choices: leave work, or don't have kids. Day recommends that Japanese policymakers focus on narrowing the gender wage gap (women earn only 66% of what men earn, one of the worst ratios in the developed world) and subsidizing child care if they are to jumpstart population growth.
It's a good paper, and won an award for best original research on Japan, but like the Australian study, Day's paper makes the dubious choice of treating men's work-life choices as a constant. Both papers assume that men commit full-time to the labor force, and that the choices families make are about the balance of women's working hours and caring hours. It's one of the most infuriating aspects of the work-life debates that the choice is so often framed that way. The reality is that in addition to earning potential and cost of child care, the degree to which male partners share in child care duties is a major factor driving women's career and family choices.
Leaving working fathers out of the choice equation tarnishes the studies' results, and can have a dangerous effect, if policymakers feel that the solution suggested by papers like these is to expand the choices available to women without expanding choices for men. Framing the work-life conundrum as a women's issue only makes it more likely that it will remain women's burden. The research error becomes self-fulfilling.
This case is a perfect example of the problem outlined by Darrell Huff in his classic book, How to Lie With Statistics. I'm a great advocate for inserting more data into debates about work and family, but it's equally important to be skeptical of the data presented to us. Ask not just, ‘Does this data answer the question we're asking?' but also, ‘Are we asking the right questions?' At the moment, I'm not convinced we are.
-reprinted from Forbes