Labor Force Participation of Women in the EU – What Role do Family Policies Play?

Abstract

AbstractWe empirically study the role of different family policies in affecting women's labor market behavior in the European Union. Women tend to assume more family duties than men and, consequently, often participate less in the labor market. Family policies aim to support families in general while a particular focus is on helping women to reconcile family duties with labor market participation. Their impact, however, is not clear, especially when it comes to different forms of labor market activity. We use a static and dynamic panel econometric framework examining the link between financial support for four types of family policies and labor force participation as well as (part‐time and full‐time) employment. The results suggest no stable significant impact of expenditures on family policies on overall labor force participation. However, higher spending on family allowance, cash benefits, and daycare benefits appears to promote part‐time employment, whereas only spending on parental leave schemes is a significant positive determinant of women's full‐time employment.