Women and Low-Skilled Workers: Other Countries' Policies and Practices That May Help These Workers Enter and Remain in the Labor Force
Released: 2007-06-14T00:00:00

Letter

Background

According to the Department of Labor, in 2005, about 60 percent of U.S. women age 16 and older were in the workforce, compared to 46 percent in 1975. Some U.S. employers offer alternative work arrangements to help workers manage both work and other life responsibilities. One type of alternative work arrangement allows workers to reduce their work hours from the traditional 40 hours per week, such as with part-time work or job sharing. Some arrangements adopted by employers, such as flextime, allow employees to begin and end their workday outside the traditional 9-to-5 work hours. Other arrangements, such as telecommuting from home, allow employees to work in an alternative location. Childcare facilities are also available at some workplaces to help workers with their care giving responsibilities. In addition to benefiting workers, these arrangements may also benefit employers by helping them recruit and retain workers.

Federal law establishes minimum levels of unpaid leave for individuals under certain circumstances. The Family and Medical Leave Act (FMLA) of 1993 enables certain employees to take up to 12 weeks per year of unpaid leave upon the birth or adoption of a child, or to care for qualifying family members or themselves in the event of a serious health condition with the guarantee of a similar job upon return. The law applies to private companies with 50 or more employees, and all federal, state, and local government agencies. To be eligible for leave, employees seeking leave must have worked for their employer for at least 1 year and for over 1,250 hours during the last year.

Some state laws provide greater family or medical leave rights than the federal law. In July 2004, California became the first state in the country to offer a comprehensive paid family leave program. The program allows workers to receive up to 6 weeks per year of partial wage replacement for leave taken to care for a seriously ill family member (child, spouse, parent, or domestic partner) or to care for a child within 1 year of birth or placement for adoption or foster care. The program, which is administered by the State Disability Insurance (SDI) system, is funded entirely by employee contributions. The paid family leave law requires a 1-week waiting period and applies to all employees who pay into the SDI system, regardless of employer size. In May 2007, Washington state enacted paid family leave legislation that grants up to 5 weeks of paid leave a year to certain employees to care for a newborn or newly adopted child.

The federal government also provides childcare subsidies for certain low- income families, and tax breaks for most parents, both to support their ability to work and to balance work-family responsibilities. Under programs funded by the Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families (TANF) and state resources, states have the flexibility to serve certain types of low-income families. The Head Start program provides comprehensive early childhood education and development services to low-income preschool children, on a part- or full-day basis. Further, the Child and Dependent Care Tax Credit allows parents to reduce their tax on their federal income tax return if they paid someone to care for a child under age 13 or a qualifying spouse or dependent so they could work or look for work. The credit is a percentage of the amount of work-related child and dependent care expenses paid to a care provider. The credit can be up to 35 percent of qualifying expenses, depending upon income.

The federal government also offers workforce development and training programs designed to assist low-wage/low-skilled workers in the United States. The Workforce Investment Act of 1998 (WIA) requires states and localities to bring together a number of federally funded employment and training services into a single system—the one-stop system. Funded through four federal agencies and administered by the U.S. Department of Labor, these programs provide services through a statewide network of one-stop career centers. Low-skilled workers and dislocated workers can choose the training they determine best for themselves, working in consultation with a case manager. Additionally, the federal government provides incentives for companies to hire low-income workers, public assistance recipients, and workers with disabilities. The Work Opportunity Tax Credit is a federal tax credit that offers employers tax breaks when they hire certain categories of job seekers, including TANF recipients. The credit is designed to help people move from welfare to work and gain on- the-job experience. Additionally, the Welfare-to-Work Tax Credit (WtWTC) is a federal income tax credit that encourages employers to hire long-term TANF Assistance recipients.

Most of the countries we studied are members of the European Union (EU); as such, they need to take EU laws into account when formulating their policies. EU legislation on employment-related issues typically provides minimum standards or basic rights for individuals across member states. For example, the 1997 directive on equal treatment of part-time work mandates that people holding less than full-time jobs be given pro rated pay and benefits without discrimination. EU directives are generally binding in terms of the results to be achieved, but an opt-out option occasionally allows member states to delay action. According to an EU official, the Union also sets targets to be achieved voluntarily at some future date. Since 2000, for example, member states have collectively agreed to increase the number of women in employment, the number of adults in lifelong learning, and the provision of childcare by the end of the decade. The EU offers financial support to its member states to help them succeed in employment goals. For example, countries can request money from the European Social Fund (ESF) for public or private programs that improve people’s skills and employability.

Other differences are relevant to consideration of the workforce attachment policies of our study countries. Although U.S. women have high levels of educational attainment, their workforce participation, in general, is lower than that of the countries we studied. In 2004, the educational attainment of women ages 25-64 in the United States, at 13.4 years, surpassed that of women in all other study countries (see app. II, table 4). While a higher education level is generally associated with greater likelihood of labor force participation, labor force participation for U.S. women is lower than that in any of our study countries except Ireland and New Zealand. For example, in Denmark, labor force participation was 85 percent, compared to 75 percent in the United States, and 68 percent in Ireland. In the Netherlands, a country where 36 percent of all employment is part-time, women constitute more than three-quarters of employees working less than 30 hours per week (see table 1).

Differences in taxation across countries reflect national choices, which are largely determined by economic and social priorities. The ratio of total tax revenues to gross domestic product (GDP) is a commonly used measure of state involvement in national economies. Countries with high tax-to-GDP ratios generally pay more from the public budget for services that citizens would have to pay for themselves—or do without—in lower-taxed countries. In 2004, Sweden had the highest tax revenue as a percentage of GDP among our study countries, at 50.4 percent. Denmark came next at 48.8 percent, followed by France at 43.4 percent. The United States had the lowest tax-to-GDP ratio in 2004, at 25.5 percent (see table 2).

Countries Have Various Policies and Practices That May Help Some Women and Low-Wage/Low- Skilled Workers Enter and Remain in the Labor Force

Governments and employers in the countries we studied developed a variety of laws, government policies, and formal and informal practices, including periods of leave, flexible work schedules, childcare, and training. Each of the countries we reviewed has some form of paid family leave, such as maternity, paternity, or parental leave, that attempts to balance the needs of employers and employees and, often, attempts to help women and low-wage/low-skilled workers enter and remain in the workforce. In addition to family leave for parents, countries provide other types of leave, and have established workplace flexibility arrangements for workers. All of the countries also subsidize childcare for some working parents through a variety of means, such as direct benefits to parents for childcare and tax credits. Last, governments and employers have a range of training and apprenticeship programs to help unemployed people find jobs and to help those already in the workforce advance in their careers.

Family Leave Policies Differed In Four Major Ways, Including Eligibility Requirements and Length, Payment, and Flexibility

Many countries have developed and funded parental leave policies to assist employees in combining their work and family lives, recognizing, in part, the need to promote women’s participation in the labor force. A 1996 directive of the European Council requires all countries in the EU— including each of the European countries we reviewed—to introduce legislation on parental leave that would provide all working parents the right to care for their newborn or newly adopted child for at least 3 months while retaining a position of equal status, recommending that benefits be paid during that time. In the U.S., the FMLA allows eligible employees approximately 3 months of unpaid leave that may be used for these purposes. (For an overview of the policies in our study countries, see app. III.) Family leave policies in the countries we studied were generally funded through tax revenues and general revenues. Because some of these countries are social welfare states, their tax revenues represent a greater share of their GDP, allowing for the funding of various policies. For example, Canada, the UK, and the Netherlands fund paid leave policies in part through national insurance programs, which use payroll taxes paid by employers and employees. Denmark’s paid maternity, paternity, and parental leaves are financed by income tax revenues through an 8 percent tax on all earned income.

Eligibility provisions are a part of most leave policies we reviewed, and sometimes the service time with an employer determines the amount of leave a parent can take. Many national leave policies in our study countries require employees to work for a period of time before they can take leave, giving employers assurances that employees are committed to their jobs. For example, in Denmark, employed women with a work history of at least 120 hours in the 13 weeks prior to the leave are allowed 18 weeks of paid maternity leave. In some countries, though, all parents are entitled to take family leave, which in some cases is paid. In Sweden, all parents are entitled to parental benefits whether or not they are working. In the UK, by law, all expectant employees can take up to 52 weeks of maternity leave, regardless of how long they have worked for their employer.

To enhance workers’ ability to take leave, the countries we studied replace all or part of the wages they forgo while on leave. Dutch employees on maternity leave are entitled to receive 100 percent of their wages, up to a maximum; their partners receive their regular rate of pay from their employers. In the UK, women who meet qualifying conditions of length of service and who earn a minimum amount for the national insurance system—or, on average, 87 British pounds per week—can receive payment generally equal to 90 percent or less of their average weekly earnings. In Ireland, women can generally be paid at 80 percent of earnings, subject to her contributions into the social insurance system. However, employers may offer more leave than legally required.

Because leave is intended to help parents balance career responsibilities with caring—not just for newborns, but for children in general—many countries allow parents to take their allotted parental leave all at once or to divide it into parts. In the Netherlands, Sweden, Denmark, and the UK, parents have the option of using their leave flexibly by dividing it into discrete parts, sometimes with the consent of an employer. In the Netherlands, for example, parents may divide the leave into a maximum of three parts and can take the leave simultaneously or following one another. The Netherlands, Sweden, and Denmark allow parents the use of parental leave until their child turns either 8 or 9, while the UK allows the use of parental leave until a child turns 5.

Recognizing that familial obligations may extend beyond an employee’s children, some countries allow workers to take leave to care for family members. The amount of time workers can take to care for family members varies among the countries we reviewed. In Canada, all employees are eligible to take 8 weeks of unpaid leave to provide care and support to a seriously ill family member or someone considered as a family member. In other countries, the leave is more limited. New Zealand requires that all employers provide a minimum of 5 days of paid sick leave for an eligible employee’s own illness or to care for family members.

Flexible Working Arrangements Help Employees Balance Work and Private Responsibilities

A few countries have developed national policies that promote flexible work opportunities, apart from leave, that may help women and low- wage/low-skilled employees join and stay in the workforce. In the Netherlands, by law all eligible employees—whether or not they are parents—have the right to reduce or increase working hours, no matter their reason for doing so. Employers can deny the request only if the change would result in a serious obstacle, such as not having enough other workers to cover the hours an employee wishes to reduce. Similarly, the UK’s 2003 Right to Request Flexible Working and Duty to Consider law allows workers to request changes to the hours or location of their work, to accommodate the care of children and certain adults. According to government officials from the UK Departments of Trade and Industry, and Communities and Local Government, this law provides the government with a cost-effective means to help women return to work. Although similar to the law in the Netherlands, this law provides employees with less defined rights, and employers in the UK may refuse an employee’s request when the proposed arrangement is not supportable by the needs of the business.

Similarly, flexible working opportunities for employees are often adjusted or developed by individual employers. Many employers adjusted the Right to Request law by extending to all employees the benefits it required, according to government officials from the UK Departments of Trade and Industry and Communities and Local Government. In other cases employers have developed new opportunities. One local government employer in the UK offers employees the ability to take a career break for up to 5 years to care for children or elders, with the right to return to the same position. Employees of the organization are also able to take time off when children are home on holidays, share the responsibilities of one position with another employee through the practice of job sharing, and vary their working hours. In Saskatchewan, Canada, one employer reported allowing employees to average their work hours over a 2-week period, giving them the ability to accumulate overtime hours and have a sense of control over their time. In Denmark, a large employer allowed an employee who was returning to work from a long-term illness to gradually increase her working hours until she reached a full-time schedule over the course of several months. Flexible working arrangements in the United States have been adopted by some employers, but are not mandated in federal law.

Childcare Policies Assist Working Parents

All of our study countries have made a public investment in child care, a means of allowing women to access paid employment and balance work and family, according to the European Commission. (See table 3). In Canada, for example, the government provides direct financial support of $100 a month to eligible parents for each child under 6. In New Zealand, support is available through a childcare tax credit of $310 per year to parents who have more than $940 in childcare costs. Researchers have reported that, like leave benefits, early childhood education and care services in European countries are financed largely by the government. According to these researchers, funding is provided by national, state, or regional and local authorities, and the national share typically is dominant in services for preschool-age children. These researchers also reported that care for very young children, and, to a lesser extent, for preschool children, is partially funded through parental co-payments that cover an average of 15 percent to 25 percent of costs.

In some countries the provision of early childhood care and education is viewed as a social right, in others as a shared responsibility. In Sweden and Denmark, parents are guaranteed a place in the state childcare system for children of a certain age, according to the European Commission. More than 90 percent of Danish children are in publicly supported childcare facilities, according to a Danish researcher. Other countries, including France, take a similar view with respect to early childhood education. In France about 90 percent of children ages 3 to 6 and about 35 percent of 2-year-olds attend public preschools, provided free of charge to parents, according to research. Other countries view the provision of child care as a responsibility shared among government, employers, and parents. In the Netherlands, overall, employers, employees, and the government are each expected to pay about one-third of childcare costs, according to a report by the European Commission (see table 3).

Aside from public support for childcare, some employers in the countries we reviewed offered additional resources for their employees’ childcare needs. For example, although not mandated by law until January 2007, many employers in the Netherlands had been contributing toward their employees’ cost for childcare. In the Netherlands, about two-thirds of working parents received the full child care contribution from their employers, according to a recent survey. In addition, a Canadian union negotiated employer subsidies to reimburse some childcare expenses for its members, according to union representatives.

Training Programs Can Be Targeted at the Unemployed or Low- Skilled Workers

Our study countries provide services intended to help the unemployed develop the skills necessary to obtain work. These include providing training directly and providing private entities and employers with resources to provide training or apprenticeships. To address the skill deficit of those who are unemployed, the UK, for example, has recently adopted recommendations to increase adult skills training, and create an integrated employment and skills service, among other things. In Denmark, the unemployed are required to accept offers, such as education and training, after 9 months of unemployment to help them find work or they will lose benefits, according to employee representatives from the largest Danish trade union confederation that represents the public and the private sectors. Particular groups of the unemployed that may face difficulty in finding employment, such as women and the low-skilled, may be offered training earlier. Employers in Denmark may receive wage subsidies for providing job-related experience and training to the unemployed, or for providing apprenticeships in fields with a shortage of available labor. In the Netherlands, the government provides individual support—including training, apprenticeships, or job coaching—for the unemployed to help them secure a job, according to the Dutch Ministry of Social Affairs and Employment. In the United States, training services generally are available through the WIA programs, which are provided by government.

Local governments and private entities also seek to help the unemployed obtain and upgrade skills. For example, a local government council in the UK provides unemployed women training in occupations in which they are underrepresented, such as construction and public transport. While the women are not paid wages during the typical 8-12 weeks of training, they may receive unemployment insurance benefits as well as additional support for childcare and transportation. Additionally, a privately run association in the Netherlands provides entrepreneurial training to women who have been on public assistance for at least 10 years to start their own businesses, according to an organization official. The association pays the local college to provide the business-related classes and coaches, who help participants develop business plans. Both of these initiatives were funded jointly by the local governments and the European Social Fund.

In addition to providing training to the unemployed, our study countries also have training initiatives focused on those already in the workforce. For example, Canada introduced an initiative to ensure that Canadians have the right skills for changing work and life demands. The program’s goal is to enhance nine essential skills—reading text, document use, working with numbers, writing, oral communication, working with others, continuous learning, thinking skills, and computer use—that provide the foundation for learning all other skills and enable people to evolve with their jobs and adapt to workplace changes, according to the government. The broad-based initiative provides resources to help organizations incorporate workplace literacy and the essential skills into existing human resources practices. Denmark has had a public system in place since the mid-1960s that allows low-skilled workers to receive free education, wage subsidies, and funding for transportation costs. About one-half of unskilled workers took part in training courses that were either publicly financed or provided privately by employers in the past year, according to a Danish researcher. The UK has also developed an initiative that offers employers training assistance to meets their needs. The UK’s Train to Gain program, based on an earlier pilot program, provides employers free training for employees to achieve work-related, competence-based qualifications that reflect the skills needed to do a job effectively. Qualifications can be earned in a variety of occupational areas, such as providing health and social services. To qualify for Train to Gain, employers need to agree to at least a minimum level of paid time that employees will be allowed to use for training. During the pilot program, employers were given a wage subsidy to compensate for giving employees paid time off; evaluations showed the effect of these subsidies to be mixed. Currently, only employers with fewer than 50 full-time employees are eligible for limited subsidies under Train to Gain. Train to Gain also provides skills advice to employers and helps match business needs with training providers. The UK Leitch Review recommended that the government provide the bulk of funding for basic skills training and that all adult vocational skills funding be routed through programs such as Train to Gain.

As is the case with other benefits, many training programs aimed at increasing employees’ skills are initiated privately by employers and employees. For example, an employer in Saskatchewan reported that he supports employees’ advancement by paying for necessary educational courses, such as those that prepare employees for required licenses. A large government employer in the UK offers flexible training to make it more easily accessible to women. For example, training is made available online, from work or home, as well as through DVDs that can be viewed at one’s convenience. In the Netherlands, according to an employer representative, most training is developed through agreements in which employers agree to pay. In Denmark, a director in the Ministry of Education reported that some companies give employees the right to 2 weeks per year of continuing education in relevant and publicly funded education.

Although Certain Workplace Policies Are Associated with Increased Participation in the Labor Force, in General, Effects Are Not Definitive

Research has found that workplace policies such as childcare and family leave encourage women to enter and return to the workforce, while evaluations of training policies show mixed results. Readily available childcare appears to enable more women to participate in the labor market, especially when it is subsidized and meets quality standards such as having a high staff-to-child ratio and high proportion of certified staff. Women are also more likely to enter and remain in the workforce if they have paid family leave, although the length of leave affects their employment. An extensive review of available research by the European Commission shows mixed results in whether training helps the unemployed get jobs. Some training initiatives have shown promise but have not been formally evaluated. In general, researchers and officials reported that it is difficult to determine the effects of a policy for a variety of reasons.

Childcare and Paid Family Leave Are Associated with an Increase in Labor Force Participation

Readily available childcare, especially when it is subsidized and regulated with quality standards, such as a high staff-to-child ratio and a high proportion of certified staff, appears to increase women’s participation in the labor force by helping them balance work and family responsibilities, according to research from several cross-national studies. While studies show that childcare is associated with an increase in female labor force participation, a report by the European Commission found that, if parents feel that there are problems with the quality of childcare—as is the case with childcare in the UK due, in part, to staff recruitment and retention issues—they will be less likely to use it. Additionally, the European Commission reports that women prolong their return to work when childcare is not subsidized and its costs are high. Low-wage workers, especially single parents, who are predominantly women, are particularly sensitive to the price of childcare, according to a European Commission report. Research from the United States also shows that highly priced childcare can deter mothers from working, according to a review of the literature. The association between childcare and women’s labor force participation is found in several studies that control for a variety of factors, including individual countries’ cultural norms and experiences. However, the relationship between early childhood education—which acts as childcare for some parents—and women’s labor force participation is uncertain. Because many unemployed mothers also place their children in subsidized preschool, any impact that the preschool has on encouraging mothers to work may appear to be diminished, according to a cross- national study.

Research shows that paid family leave encourages women’s employment by helping them to enter the labor market and to return to work more quickly after having a child. Women who have a set leave period, and a guarantee of a job upon return, tend to return to work more quickly than women who have to quit their job and re-enter the labor market. One extensive review of the literature on family leave found that leave increases the chance that women will return to work by the end of the year following the birth. Another study examining paid maternity leave of varying lengths of time in several Western European countries, including Denmark, France, Ireland, and Sweden, concluded that maternity leave may increase women’s employment rate by about 3-4 percent. Furthermore, paid leave set aside for fathers has allowed Swedish mothers to return to work more quickly since fathers are encouraged to share in the caring duties, according to one study.

Research findings, however, are not conclusive as to the ideal length of family leave to encourage women to return to work. For example, if leave is too short, women may quit their job in order to care for their child, according to a European Commission report. Another study, however, found that if leave is too lengthy, it may actually discourage women from returning to work after having a child. One researcher stated that French mothers with at least two children returned to the workforce less frequently when they became eligible for 3 years of family leave. On the contrary, some researchers found that Sweden’s lengthy leave allowed more women to enter and remain in the labor force in the long run. One review of the literature concluded that leave of up to about 1 year is positively associated with women’s employment, while another found that after 20 weeks, the effect of leave on employment begins to deteriorate.

The Effects of Most Workplace Policies and Practices, Including Training, Are Not Definitive

Evaluations of training for the unemployed, where they exist, have shown mixed results in helping individual workers. Research on training program participants from Sweden and Denmark found that training programs do not appear to positively affect all participants’ employment. While the Danish government’s labor market policies seem to have successfully lowered the overall unemployment rate to around 4 percent by the end of 2006, according to Danish officials, the effect of specific training programs on participants’ employment is difficult to discern. On the other hand, a number of evaluations of French training programs suggest that these programs help participants secure jobs. New Zealand’s evaluation of two of its training programs, which provide both remedial and vocational skills to participants, found that the training had a small effect on the participants’ employability. Nearly all evaluations of Canadian and U.S. training programs show that the programs increased the ability of the unemployed to get jobs, according to a literature review by the Canadian government. According to a European Commission report, one researcher’s review of 70 training program evaluations, including those in Denmark, France, the Netherlands, Sweden, and the UK, suggested that training programs have a modest likelihood of making a positive impact on post-program employment rates. However, the European Commission reports that many studies on individual outcomes are based upon short- term data, while the effects on participants’ employment may not be evident for 1 to 2 years or more. This is partly because participants may not actively search for a job while they are in training. In the long run, however, training programs may lead participants to find more suitable jobs and spend less time out of the workforce.

Some national and local training initiatives that we reviewed—both those for the employed and those for the unemployed—have shown promise, although some have not been subject to an evaluation. For example, an evaluation of the precursor to the UK’s national Train to Gain program found that 8 out of 10 participants believed they had learned new skills, and employers and participants both felt that the training enabled participants to perform better at work. However, the evaluation estimated that only 10-15 percent of the training was new training, while the remaining 85-90 percent of the training would have occurred without the program. Although a planned evaluation has not yet been conducted, an individual UK employer reported that it trained 43 women for jobs in which they are underrepresented. Fourteen of these women found employment and 29 are in further training. Those in further training report that they are more confident that they can find a job, and some are actively seeking employment, according to the employer. Further, 10 out of 70 women began their own business after completing a program in the Netherlands that provides women on social assistance with training to become entrepreneurs, according to the program provider.

Even where evaluations do exist, it is difficult to determine the effects of any policy for a variety of reasons. Research indicates that policies that appear to increase female labor force participation also interact with cultural factors, such as a country’s ideology concerning social rights and gender equality, according to a researcher from Ireland. In some cases, too, new policies interact with the effects of existing ones. For example, a researcher reported that the French government provides payments to mothers who may choose to stay home with their children, while also subsidizing childcare that encourages mothers to work. Additionally, changes in the labor market may actually bring about the enactment of policies, rather than the other way around. For example, it is difficult to be sure whether the availability of childcare causes women to enter the labor force or if it is an effect of having more women in the workforce, according to one researcher’s review of the relevant literature. Several of the studies we reviewed attempt to correct for these factors, but a researcher stated that it is difficult to determine cause and effect with certainty even with the best of studies.

Further, few evaluations of certain policies and practices have been conducted. According to both a European Commission report and a study by the Canadian government, the majority of training evaluations come from Canada and the United States, where such studies are often mandated. Evaluations are conducted less frequently in Europe although, according to the European Commission, this is starting to change. Moreover, some policies were recently developed, and governments frequently make changes to existing policies, a fact that may make it difficult to evaluate them. For example, a report by the Canadian government states that flexible work arrangements are relatively new and represent an area in which research is needed. In other cases, a policy simply codified into law a widely used practice. For example, a government official in the Netherlands reported that it was very common for Dutch women to choose to work part-time even before legislation passed that promoted employees’ right to reduce their working hours.

While Several Factors Affect Uptake, Employees’ Use of Workplace Benefits Can Have Implications for Employers and Employees

The experiences of the countries we reviewed have shown that characteristics of policies, such as the level of payment during leave, can affect whether an employee uses various workplace benefits. For example, the province of Saskatchewan in Canada provides 12 days of unpaid leave per year, for time away from work to deal with emergencies or sickness. However, according to a Saskatchewan government official, low-wage workers cannot always afford to take the unpaid leave. Similarly, according to a University of Bristol professor, low-income mothers in the UK disproportionately return to the workforce at the end of paid maternity leave, whereas more affluent mothers tend to return at the end of unpaid leave. The level of payment can also affect the likelihood that men are willing to take leave, thereby allowing women to shorten their leave and return to work if they choose to do so. A review of the literature from European countries demonstrates that men are much more likely to take leave when they receive a high percentage of their wages. When parental leave can be shared between parents and the level of payment is low, women tend to take the leave, in part because their income level is often lower than their husband’s. The review also found that men are more likely to take parental leave when it reserves a period of time exclusively for their use, and does not allow that time to be transferred to the mother. A report from the European Commission also found that the ability to use leave flexibly, such as for a few hours each day or over several distinct periods rather than all at once, can also increase parents’ take-up rates for leave as parents are able to care for their children and stay in the labor force at the same time.

Employer views and employee perceptions on workplace benefits, such as leave and training, can also directly affect an employee’s use of them. According to researchers in Canada, flexibility in the workplace is determined more by individual managers and workplace culture than by whether specific policies exist. Their research found, for example, that the ability to arrange a schedule in advance and interrupt it if needed is very important to employees, but that this ability is not necessarily associated with express policy. What matters most, rather, is who an employee reports to and how willing a supervisor is to be flexible. Research from the European Commission also indicates that an organization’s culture can determine whether or not parents take leave and that both women and men may face unsupportive workplaces. For example, according to the report, men may face negative attitudes from employers when wishing to take family leave. In addition, a review of a UK training program that offered free or subsidized training and wage subsidies to employers for the time employees spent in training found that small employers were generally less positive than larger ones about the value of training for employees. According to a UK employee representative, despite the program’s benefits, many small employers did not participate, as they either did not see a need for training or feared losing staff if they acquired new skills. University researchers in Denmark expressed similar concerns, stating that companies face risks in providing training to increase the skills of their employees as employees with additional skills may leave. Further, according to a university researcher in Canada, employer-supported training tends to be provided to the higher-skilled and educated, and the low-skilled may have limited opportunity to improve. A cross-national study from the OECD, which included the countries we reviewed, found that many employers tend to view training for the low-skilled as a cost, rather than an investment, and devote substantially more resources to their high-skilled workers, on average. In addition, an employee’s perceptions on training can also affect his or her uptake of opportunities. For example, employee representatives from Denmark’s largest trade union confederation said that low-skilled employees are more likely to have had negative experiences with education and that these experiences can affect whether they take advantage of workplace training opportunities to increase their skills.

Employees’ use of workplace benefits can create management challenges for their employers. For example, an employer in Saskatchewan reported that covering for the work of staff on family leave can be complicated. He said that although he was able to hire temporary help to cover an employee on maternity leave, he faced an unexpected staff shortage when the employee decided toward the end of her leave not to return to work and the temporary employee had found another job. In addition, a university in the UK reported difficulties in managing employees’ leave, as many of the organization’s research projects are externally funded and do not provide extra funds to cover for employees on maternity leave. She added that finding a suitable replacement for employees that are specialized also poses problems. An official affiliated with the largest employer association in the Netherlands stated that it can be hard to organize work processes around employees’ work interruptions, especially during short-term and unplanned leaves. Similarly, university researchers in Denmark reported that coordinating arrangements during an employee’s absence, including during training, may be problematic for small employers.

The use of family leave or part-time work schedules may have negative implications for an employee’s career. Employers have indicated that they would prefer to hire an older woman with children rather than a younger woman who has yet to have children, according to university researchers in Denmark. In addition, long parental leaves may lead to an actual or perceived deterioration in women’s labor market skills, according to an EU report, and can have negative effects on future earnings. According to employee representatives in Canada, in the high-tech sector, where there are rapid changes in technology, the use of parental leave can be particularly damaging. According to a university employer in the UK, women who choose part-time work may find that they continue to work full-time schedules due to the demanding nature of their chosen field, even though they receive part-time wages. In addition, some part-time jobs have no career advancement opportunities and limited access to other benefits, such as payment during leave and training. Since employers tend to target their training to higher-skilled and full-time workers, employees who opt to work part-time may have fewer opportunities for on-the-job training that could help them advance, according to university researchers in the Netherlands.

Concluding Observations

Workplace policies and practices of the countries we studied generally reflect cooperation among government, employer, and employee organizations. Many developed countries have implemented policies and practices that help workers enter and remain in the workforce at different phases of their working lives. These policies and practices, which have included family leave and childcare, for example, have been adopted through legislation, negotiated by employee groups, and, at times, independently initiated by private industry groups or individual employers.

U.S. government and businesses, recognizing a growing demand for workplace training and flexibility, also offer benefits and are seeking ways to address these issues to recruit and retain workers. Potentially increasing women’s labor force participation by further facilitating a balance of work and family, and improving the skills of low-wage workers throughout their career, may be important in helping the United States maintain the size and productivity of its labor force in the future, given impending retirements. While other countries have a broader range of workplace benefits and flexibility and training initiatives, little is known about the effects of these strategies. Whether the labor force participation gains and any other positive outcomes from adopting other countries’ policies would be realized in the United States is unknown. Moreover, any benefits that might come from any initiatives must be weighed against their associated costs. Nonetheless, investigating particular features of such policies and practices in some of the developed countries may provide useful information as all countries address similar issues.

Agency Comments

We provided a draft of this report to the Departments of Labor and State for review and comment. The Department of Labor provided technical comments on the draft report, which we have incorporated where appropriate. The Department of State did not have comments on this report.

We are sending copies of this report to the Secretary of Labor, the Secretary of State, appropriate congressional committees, and other interested parties. In addition, the report will be available at no charge on GAO’s Web site at http://www.gao.gov.

A list of related GAO products is included at the end of the report. If you or your staff have any questions about this report, please contact me at (202) 512–7215. You may also reach me by e-mail at nilsens@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix IV.

Appendix I: Objectives, Scope and Methodology

To describe the policies and practices implemented in other developed countries that may help women and low-wage/low-skilled workers enter and remain in the labor force, and to identify the factors that affected employees’ use of workplace benefits and the resulting workplace implications, we conducted site visits or in-depth interviews with various officials in four developed countries—Canada, the United Kingdom (UK), the Netherlands, and Denmark. We selected Canada because of its limited government role in the economy, and the UK to compare policies with a European country that has a preference for a limited government intervention in labor markets, and because it recently implemented a law that encourages flexible work schedules. We selected the Netherlands as it has a higher proportion of part-time workers than any other country in Europe and has an extensive workforce development system. We selected Denmark because it has had work-family policies in place for more than 30 years, has a goal of gender-equitable labor force participation, and provides extensive training programs. We interviewed government officials, researchers, private employers, and trade associations or unions in each of the countries about their experiences with such policies and practices. We also visited Belgium to meet with officials from several European Union (EU) institutions, such as the European Commission and the European Foundation for the Improvement of Living and Working Conditions—organizations that provided a broader Europe-wide perspective on the selected policies and practices and current political environment across countries.

To examine the change in the targeted groups’ employment following the implementation of the policies and practices, as well as to identify the factors that affected employees’ use of workplace benefits and the resulting workplace implications, we conducted an extensive literature review of workforce flexibility and training strategies in a range of developed countries. Our literature reviews focused on cross-national studies that examined our selected countries. To identify relevant studies for our research, we conducted database searches, spoke with U.S. and international academics, and spoke with knowledgeable U.S. agency officials. We selected studies that had been conducted within the past 10 years, studies that included at least three of our selected countries, and studies that we determined were methodologically sound. Our review of these studies was limited to the extent that they were available in English. These reviews provided information on the policies and practices in use, their target population and purpose, related laws and regulations, and any changes in employment following the implementation of the policies and practices. Additionally, we reviewed research reports from the Organisation for Economic Co-operation and Development (OECD) and the European Commission (EC).

We reviewed four other countries based on policies and practices they had implemented for our target groups. Information about these countries’ policies/practices came from extensive literature reviews and discussions with U.S. and foreign-based researchers. The selected countries were Ireland, which has experienced a large decline in unemployment and low- paid work in the last decade and has a flexible labor market; France, which supports women’s employment in part through universal childcare; Sweden, which has had work-family policies in place for more than 30 years; and New Zealand, which implemented legislation mandating that all employers provide a minimum number of paid sick days to workers as well as legislation mandating paid parental leave for certain employees.

To provide context, we identified relevant national policies in the United States. However, we did not conduct a comprehensive review of similar workplace flexibility and training strategies in the United States, nor did we seek to determine whether other countries’ strategies could be implemented in the United States.

Additionally, our review of related laws and regulations of other countries relied on secondary sources of analysis rather than independent analysis of foreign laws. Our review of the laws and regulations was limited by the extent that specific information from secondary sources was accessible and written in English.

Appendix II: Selected Labor Market Statistics

Appendix II: Selected Labor Market Statistics The U.S.

The U.S.

The U.S. purchasing power parity (international dollars)

The U.S.

Appendix III: Maternity, Paternity, and Parental Leave Provisions

Appendix III: Maternity, Paternity, and Parental Leave Provisions examined.

Appendix IV: GAO Contact and Staff Acknowledgments

Acknowledgments

Diana Pietrowiak, Assistant Director; Gretta L. Goodwin, Senior Economist; Avani Locke, Senior Analyst; and Seyda Wentworth, Senior Economist made significant contributions to all phases of this report. Stephanie Toby, Analyst, made significant contributions to data collection, data analysis, and message and report development. Sheila R. McCoy provided legal assistance; Gregory Wilmoth provided methodological assistance; and Charles Willson, Communications Analyst, assisted with report development.

Related GAO Products

An Assessment of Dependent Care Needs of Federal Workers Using the Office of Personnel Management’s Survey. GAO-07-437R. Washington, D.C.: March 30, 2007.

Highlights of a GAO Forum: Engaging and Retaining Older Workers. GAO-07-438SP. Washington, D.C.: February 2007.

Workforce Investment Act: Employers Found One-Stops Centers Useful in Hiring Low-Skilled Workers; Performance Information Could Help Gauge Employer Involvement. GAO-07-167. Washington, D.C.: December 22, 2006.

Employee Compensation: Employer Spending on Benefits Has Grown Faster Than Wages, Due Largely to Rising Costs for Health Insurance and Retirement Benefits. GAO-06-285. Washington, D.C.: February 24, 2006.

Social Security Reform: Other Countries’ Experiences Provide Lessons for the United States. GAO-06-126. Washington, D.C.: October 21, 2005.

Child Care: Additional Information Is Needed on Working Families Receiving Subsidies. GAO-05-667. Washington, D.C.: June 29, 2005.

Workforce Investment Act: Substantial Funds Are Used for Training, but Little is Known Nationally about Training Outcomes. GAO-05-650. Washington, D.C.: June 29, 2005.

Highlights of a GAO Forum: Workforce Challenges and Opportunities for the 21st Century: Changing Labor Force Dynamics and the Role of Government Policies. GAO-04-845SP. Washington, D.C.: June 2004.

Women’s Earnings: Work Patterns Partially Explain Difference between Men’s and Women’s Earnings. GAO-04-35. Washington, D.C.: October 31, 2003.

Older Workers: Policies of Other Nations to Increase Labor Force Participation. GAO-03-307. Washington, D.C.: February 13, 2003.

Older Workers: Demographic Trends Pose Challenges for Employers and Workers. GAO-02-85. Washington, D.C.: November 16, 2001.