women Archives

New Thinking in the News

Why women are crucial to our coronavirus response, how patents impede our progress towards resolving the pandemic, and what an erosion of trust means for our society. That and more in this week’s selection of #NewThinkintheNews.

1 | America’s coronavirus response must center on women. And the Black Plague helps show how in NBC by Lynn Parramore

“Feminist scholars have long pointed out that economists, political scientists and historians tend to think of the market and the state as the key spheres of reality — while regarding the home and the family as afterthoughts. But as the changes in medieval Europe in the wake of a terrible pandemic illustrate, when women are freed from burdens in the home and gain opportunities to participate fully in all aspects of life and work, the future grows brighter for everyone.”

2 | Patents vs. the Pandemic in Project Syndicate, co-authored by Arjun Jayadev and Joseph Stiglitz

“In responding to the pandemic, the global scientific community has shown a remarkable willingness to share knowledge of potential treatments, coordinate clinical trials, develop new models transparently, and publish findings immediately. In this new climate of cooperation, it is easy to forget that commercial pharmaceutical companies have for decades been privatizing and locking up the knowledge commons by extending control over life-saving drugs through unwarranted, frivolous, or secondary patents, and by lobbying against the approval and production of generics. … It’s time for a new approach. Academics and policymakers have already come forward with many promising proposals for generating socially useful – rather than merely profitable – pharmaceutical innovation. There has never been a better time to start putting these ideas into practice.”

3 | COVID-19 and the Trust Deficit, in Project Syndicate by Mike Spence

“The problem, as we warned back in 2012, is that we are living in an era of policymaking paralysis. “Government, business, financial, and academic elites are not trusted,” we wrote. “Lack of trust in elites is probably healthy at some level, but numerous polls indicate that it is in rapid decline, which surely increases citizens’ reluctance to delegate authority to navigate an uncertain global economic environment.” Change those last words to “navigate a highly chaotic public-health and economic shock,” and the statement loses none of its relevance today.

4 | Condivergence: Thinking fast and acting slow in the pandemic war in The Edge Malaysia by Andrew Sheng

“There will be no return to the old normal. Equilibrium was going anyway with the trade war. Technology was already changing the supply chains and business models. The pandemic only destroyed the old offline big mall business model faster as everyone shifts to online business. The only problem is that most policymakers do not have the data, or the understanding as to how, to make that transition without huge costs to jobs and businesses, at least in the short run, other than to run larger deficits…. The real winners will be those who learn, adapt and innovate so that all of us emerge stronger.”

5 | The EU should issue perpetual bonds, in Project Syndicate, by George Soros

“The EU is facing a once-in-a-lifetime war against a virus that is threatening not only people’s lives, but also the very survival of the Union. If member states start protecting their national borders against even their fellow EU members, this would destroy the principle of solidarity on which the Union is built… Instead, Europe needs to resort to extraordinary measures to deal with an extraordinary situation that is hitting all of the EU’s members. This can be done without fear of setting a precedent that could justify issuing common EU debt once normalcy has been restored. Issuing bonds that carried the full faith and credit of the EU would provide a political endorsement of what the European Central Bank has already done: removed practically all the restrictions on its bond purchasing program.”

Every week, we share a few noteworthy articles that showcase the work of new economic thinkers around the world. Subscribe to receive these shortlists directly to your email inbox.

Female employment rates are rising across the world, but not in the US. Why?

Japan is not exactly the country that comes to mind as a model of gender equality and high labor force participation for women. In 1995, the OECD estimated women’s employment rate in Japan at 56.5 percent, almost 10 percentage points lower than in the U.S., which had an employment rate of 66 percent for women at the time. Between 1995 and 1999, the employment rate for Japanese women grew by less than half a percentage point, while for women in the U.S. it grew by almost 3 percentage points.

However, since 2000 this trend completely reversed. Between 2000 and 2015, the employment rate for women in Japan increased by almost 14 percentage points, while in the U.S. it dropped by over 6 percentage points. Japan’s employment rate for women surpassed the U.S. in 2014. Currently, almost 65 percent of Japanese women are employed, while only about 63 percent of women in the US are employed.

In recent years, Japan has launched extensive campaigns to encourage labor force participation by women. The government took various steps such as increasing allowances given to new parents, subsidizing daycare, and ensuring both mothers and fathers benefit from paid parental leave.

A look at the employment rate for women in some other OECD countries over time shows that other countries had increases similar to Japan’s. The only country besides the U.S. where the participation of women in the labor force has decreased since 2000 is Denmark, which has seen a 1.8 percentage point drop in the employment rate of women. Despite this drop however, Denmark still boasts one the highest employment rates for women of any country in the world.

In Germany, Japan, Canada, France, and the U.K. the employment rate for women has been increasing. In the last 10 years, German women have seen the biggest gains in their employment rate, which increased by 17 percentage points. The increases in the other countries have been more modest: 2 percentage points for Canada, 11 percentage points for Japan, 4 percentage points for France, and 3 percentage points for the U.K.

By 2015 only France had a lower employment rate for women than the U.S. While France still trails behind the U.S., it has made progress in the past 10 years. The employment rate for women is on a steady upwards trend, meaning it could surpass the U.S. in the near future.

What all other countries besides the U.S. have in common is fairly generous parental leave policies for new parents. While in the U.S. new parents have no guarantee of paid leave, in Japan both mothers and fathers can take up to 58 weeks of paid leave. New mothers are guaranteed 58 weeks of paid leave in Germany, 52 in Canada, 50 in Denmark, 42 in France, and 39 in the U.K. For new fathers, France offers 28 weeks of paid leave, Germany, nine weeks, and the U.K. and Denmark, two weeks.

Furthermore, child care costs in the U.S. are extremely high, and are growing at a much faster pace than overall inflation. The rising costs of childcare make it unaffordable for many parents, especially for low-wage workers. The Economic Policy Institute found that childcare costs in some areas can take up more than a quarter of a family’s income. In some states, costs for daycare are higher than for college tuition.

This post originally appeared on the blog of the Center for Economic and Policy Research.

Paid Leave and Daycare: Luxuries of the Wealthy

The U.S. trails the rest of the world in benefits available to families. Currently, the only industrialized country that does not guarantee paid maternity leave for new mothers is the United States. While other countries offer generous paid parental leave and some form of childcare subsidies, the U.S. does not. This lack of policies to support working families widens economic inequality and limits opportunities of children not born in wealthy households.

Deficit hawks often use their concern for future generations as a basis to argue in favor of cutting entitlement programs such as Social Security. Instead of talking about cutting entitlements, the story should be about expanding them with programs that will actually help children, such as providing paid family leave for parents and addressing the rising costs of childcare. If our children are so important to deficit hawks, then why do they oppose policies that would actually have a positive impact on their future?

Various studies have pointed out the positive impact of paid parental leave on both the child and family’s health. Some of the known benefits are lower child mortality, lower rates of post-natal depression in mothers, and a greater likelihood that mothers will return to work. Particularly interesting is a study that points to higher educational attainments and incomes for children whose mothers had taken maternity leave.

In the United States, the Family Medical Leave Act (FMLA) offers 12 weeks of job-protected unpaid leave to eligible employees. To qualify for unpaid leave under the FMLA, an employee needs to have been working for over 12 months for a company that hires at least 50 people. While this might be a start, it leaves about half of the workers uncovered. Even for those who are covered by the FMLA, they must afford giving up their paychecks for those 12 weeks. The act does little to help those who are left out or cannot afford to renounce their paychecks. This adds pressure on people at the lower end of the income distribution that might be pushed below the poverty line if forced to give up their incomes.

California, New Jersey, and Rhode Island are the only three states that offer paid family leave by building onto existing disabilities programs. These states labeled pregnancy as a “temporary disability,” which offered a path to receiving a wage replacement for up to 6 weeks. An extensive study from the Center for Economic and Policy Research found that introducing the policy had a positive or no noticeable effect on 89 percent of the businesses surveyed. However, these policies are very modest compared to the rest of the world, with countries sometimes offering more than 50 weeks of paid leave.

Despite the lack of a federal mandate, some employers voluntarily provide paid family leave. While prestigious companies boast generous leave policies, they are usually only available to highly skilled and highly paid workers. The BLS estimates that about 13 percent of all workers in the US have access to paid family leave. However, there are very large discrepancies between types of workers. Twenty-five percent of those working in the management, business, and financial sector benefit from paid family leave, compared to only 7 percent of those working in the service industry.

The above figure shows the striking differences in access to paid leave by wage level. Top-earners are more than 4 times likelier than those at the lower end to be offered paid family leave by their employer. The data illustrate how mandating paid leave would help those who need it the most and are least likely to afford to take unpaid leave.

Another issue that disproportionately affects lower-income families is the cost of childcare. The Economic Policy Institute found that minimum wage workers would have to spend most of their income on childcare. Another shocking finding is that in 33 states the cost of infant care exceeds average tuition at a public 4-year university. While conversations about college affordability and the debt some students have to incur to cover the costs are common, the issue of daycare affordability is discussed much less. The quality of daycare affects the future outcomes for children, putting those whose parents cannot afford high-quality childcare at a clear disadvantage.

It is fairly common practice in many other countries for the government to subsidize childcare. The generous leave policies, along with childcare subsidies seem to be working for other countries that are catching up with the US in terms of female labor force participation. Surprisingly enough, at some point in its history, the US had a government funded universal childcare program. During World War II, the Lanham Act provided funds to enable women to participate more actively in the labor market. Despite the positive impact the program had, it was abandoned once the war ended and the men who returned took back their jobs. If such a program was possible then, it is most certainly possible now, when a high percentage of women are in the labor market.

With childcare costs outpacing overall inflation, while wages not at the top of the distribution have been stagnating, the burden of raising children falls disproportionately on families that are not wealthy. Paid leave and affordable daycare would help children grow up to their full potential. By lowering financial strain on the parents and improving outcomes for the children, these policies would also tackle the growing income inequality. Instead of focusing on reducing the deficit, which would actually hurt future generations, the U.S should expand entitlements to children to show it is really concerned with their future.