Family policies and the on-going economic crisis Leave Policies & Research Network meeting, Paris, 17 October 2013 Willem Adema Senior Economist, Social Policy Division, OECD
Diverse trends in family outcomes : it is hard to do well in all areas of Family and Child policy.
Child and youth poverty has increased slightly in many countries Poverty rates among children aged 0-17 years, 2008-2010 Poverty rates among youth aged 18-25 years, 2008-2010 Source: OECD Income Distribution database (www.oecd.org/social/inequality.htm)
So far, during the crisis men have been most likely to face employment losses. Employment-to-population ratio for persons aged 15-64 years, 2007-2012 Women Q4 2012 Q1 2007 Men Iceland Norway Netherlands Germany Australia United Kingdom United States Japan France OECD average Ireland Korea Italy Greece 100 90 80 70 60 50 40 40 50 60 70 80 90 100 Source: OECD Employment database (www.oecd.org/employment/database)
The fertility rebound that occurred in many countries during the 2000s has stalled Total fertility rate Source: OECD Family database (www.oecd.org/social/family/database)
During the crisis public social spending initially increased, but it has stabilised and/or is in decline in many countries.
The impact of the crisis on social spending trends varies across countries Annual growth in real public social spending and real GDP, Index 2007= 100 (left scale and public social spending as a % GDP (right scale), 2007-2012 Australia 150 % 35 France 150 % 35 140 130 120 30 25 140 130 120 30 25 110 20 110 20 100 90 80 15 10 100 90 80 15 10 70 2007 2008 2009 2010 2011 2012 5 70 2007 2008 2009 2010 2011 2012 5 Greece % 150 140 130 120 110 100 90 80 70 2007 2008 2009 2010 2011 2012 United States 35 150 % 35 140 30 30 130 25 120 25 20 110 20 100 15 15 90 10 80 10 5 70 2007 2008 2009 2010 2011 2012 5 Source: OECD Social Expenditure database (SOCX, www.oecd.org/els/social/expenditure).
In most countries, family spending rose during the first few years of the crisis Public family spending in percentage of GDP, 2007-2010 Source: OECD Social Expenditure database (SOCX, www.oecd.org/els/social/expenditure).
General government net lending, % of GDP 5 0 5 10 and for 2007-2009, it is hard to discern a direct link between family benefit spending and budget deficits. Public family spending and General government lending, in percentage of GDP, 2007-2009 KOR SVN CHE ESP CAN ITA POL JPN USA PRT GRC EST 2007 2009 NZL LUX AUS OCD DEU NLD IRL CZE BEL AUT ISR SVK DNK SWE HUN GBRFRA General government net lending, % of GDP 5 0 5 10 KOR USA CHE ITA CAN POL JPN PRT ESP SWE LUX EST NZL DEU FIN DNK AUT HUN AUS NLD SVN OCD CZE BEL ISR SVK FRA ISL GBR 15 15 GRC IRL 20 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Publicspending on family benefits, % of GDP 20 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Publicspending on family benefits, % of GDP Source: OECD Social Expenditure database (www.oecd.org/els/social/expenditure) and OECD National Accounts database (www.oecd.org/std/na/).
Social and Family policy have to do the same or more with less: the challenge will be for policy to become more effective. In face of this challenge, the policy response differs significantly across countries
Participation in formal childcare continued to increase during the crisis Childcare enrolment rates for children aged 0-2 years, 2003-2010 Preschool enrolment rates for children aged 3-5 years, 2003-2010 Source: OECD Family database (www.oecd.org/social/family/database)
while the duration of child-related leave changed little. Total length of paid leave available to mothers (weeks) Childcare and preschool enrolment rates (%), 2003-2010 70 2003 70 2010 Childcare enrolmentrate for children under 3 years (%) 60 50 40 30 20 AUS 10 0 BEL NOR MEX NLD FRA GBR IRL POL ESP GRC ICL FIN LUX DNK PRT KOR JPN DEU ITA HUN NZL AUT R² = 0.1844 0 50 100 150 200 250 Total lengthof paid leave availabel for mothers (weeks) CZR Childcare enrolmentrate for children under 3 years (%) 60 50 40 30 20 10 0 USA AUS ESP NZL MEX PRT ICL NOR BEL IRL NLD FRA LUX GBR FIN DNK ITA JPN DEU GRC KOR SWE AUT HUN CZR POL R² = 0.3049 0 50 100 150 200 250 Total lengthof paid leave available for mothers (weeks) SLK Source: OECD Family database (www.oecd.org/social/family/database)
Many fiscal consolidation measures affected family benefits during 2009-2012 Changes in family-related benefits, 2009-2012 Country Type of benefit Year Reform Benefit level / Eligibility Description duration France Family benefit 2009 + One off family allowance top up Income tax 2009 + Reduction in bottom tier tax Childcare provision 2009 + One off increase in childcare vouchers Greece Maternity leave 2009 + Include mothers in the private sector Child benefit 2012 + New means testing Family benefit 2012 Extension of family allowance for 3rd child onwardsabolished Hungary Family benefit 2009 + One off payment for low income families Childcare provision 2009 + Extension for low income families Family benefit 2011 Temporary freeze on universal allowance Ireland Maternity leave 2009 + Increase in replacement rate Childcare provision 2009 + Free pre school year Child benefit 2009 Reduction in benefit and age restriction Italy Family benefit 2009 + One off payment to low income families / temporary increase in family allowance Birth grant 2009 + Temporary lump sum payment Family benefit 2009 One off payment abolished United KingdoChild benefit 2009 + Increase in amount Income tax 2009 + Increase in tax threshold for low income families Tax credit 2009 Reduction in income test threshold Birth grant 2009 Abolition of a Health during pregnancy grant Source: OECD MCM 2013 It s all about People (www.oecd.org/mcm/c-min(2013)4-eng.pdf).
and family benefits have become less generous since the onset of the crisis Family benefits, as a percentage of average worker wage, 2001-2011 Source: OECD Benefits and Wages database (www.oecd.org/els/social/workincentives).
Reform (announced) in 2013 also follows different approaches across countries. France (for 2014): reduced fiscal advantage Quotient Familial; reduced PAJE payments, but increased meanstested family supplements; more childcare places (275000 in 5 years: creches, nounous, maternelles ). Germany: introduction of a childcare guarantee, but also of a home care allowance ( Betreuungsgeld ) for parents who do not use publicly funded childcare facilities. The Netherlands: Phase out of age differentiation and no indexation of child allowances in 2014 2015; cuts in childcare support, abolition tax relief parents on parental leave; devolution of Youth services. The United Kingdom: means test in Child benefit; Benefit income cap at GBP 500 p/w; extension of free 15 hours to two year olds as from September.
Thank you and further information OECD Family database www.oecd.org/social/family/database OECD Social Expenditure database www.oecd.org/els/social/expenditure OECD gender portal www.oecd.org/gender/data OECD Benefits & Wages database www.oecd.org/els/social/workincentives OECD Income Distribution database www.oecd.org/social/inequality.htm OECD Employment database www.oecd.org/employment/database OECD MCM 2013 It sall about People (www.oecd.org/mcm/c MIN(2013)4 ENG.pdf)