PERSPECTIVE ARTICLE: The impact of Nordic countries’ family friendly policies on employment, wages, and children

Abstract

The Nordic countries at the same time exhibit a remarkably high participation rate of mothers and a more moderate decline in fertility rates compared to other Western countries. This has been attributed to the fact that the welfare state model and, especially, the family friendly policies chosen in the Nordic countries are unique. In this paper we evaluate the impact of Nordic countries’ family friendly policies on employment, wages and children’s well-being. We demonstrate that, although the ‘Nordic model’ has been successful in boosting female employment, it is a costly solution. Furthermore, family-friendly policies mainly directed towards giving mothers the right to be on long paid maternal leave have adverse effects on women’s wages with consequences for gender equality. Indeed, extensive family-friendly schemes may even have created a ‘system-based glass ceiling’ hindering women’s career progression. There is no evidence however of a trade-off between family-friendly policies and family welfare as effects on child development and children’s well-being of publicly provided child-care are found to be modest or even positive.