Labour market integration of women and low-skilled workers

In June 2007, the US Government Accountability Office published a study on other countries’ policies and practices aimed at helping women and low-skilled workers to enter and remain in the labour force; among the countries compared are six EU Member States. The study concludes that quality, preferably subsidised, childcare and paid parental leave have a real impact on women’s employment. However, training programmes for low-skilled workers showed little effect.

Purpose of the study

Demographic challenges such as increasing retirement and declining fertility rates affect labour force growth in many developed countries. Better labour market inclusion of women and low-skilled workers may help to maintain the size and productivity of the workforce.

In order to face these challenges, the US Congress asked the Government Accountability Office (GAO) – its audit, evaluation and investigative arm – to compare strategies for better inclusion of women and low-skilled workers in other developed countries. The aims were to:

  • describe the policies and practices implemented in each country;
  • examine the outcomes of these policies;
  • identify the factors affecting employees’ use of workplace benefits and the resulting implications.

Methodology

The study Women and low-skilled workers (684Kb PDF) is mainly based on an extensive literature review of workplace flexibility and training strategies in eight developed countries. Alongside Canada and New Zealand, six EU Member States were compared: Denmark, France, Ireland, the Netherlands, Sweden and the United Kingdom. In addition, the researchers conducted site visits and in-depth interviews with government officials and social partners in four of these countries – Canada, Denmark, the Netherlands and the UK. Finally, as EU legislation has an increasing impact on labour market policies, officials from EU institutions such as the European Commission and the European Foundation for the Improvement of Living and Working Conditions were also questioned.

Comparison of policies

Regarding the labour market integration of women, the study focuses on three types of policies.

  • Parental leave policies exist in each of the countries compared, but largely differ in terms of eligibility, requirements and length, financing and flexibility.
  • Childcare facilities are subsidised, but to varying degrees, ranging from a tax credit of NZD 400 (€213 as at 13 December 2007) in New Zealand to free of charge public childcare in Denmark and Sweden.
  • National policies for flexible working arrangements that may help employees to balance work and private responsibilities are identified in only a few countries. The main example is the right of the employee to reduce or increase working hours, which is codified in the Netherlands and – to a lesser degree – in the UK.

With regard to labour market integration of low-skilled workers, the study compares national training programmes targeted at unemployed or low-skilled workers. The main examples are the Canadian Essential Skills and Workplace Literacy Initiative introduced in 2003, the public system of free education for low-skilled workers established in Denmark since the mid 1960s and the UK’s Train to Gain programme.

Outcomes of these policies

The evaluation of the success of these policies proved to be rather difficult. Most of the policies are planned to take a long-term approach so that a direct link between such measures and the development of the labour market can as yet hardly be determined. Sometimes, government policies only confirm already well-established social practices; for example, part-time work was common among women in the Netherlands even before it was promoted through legislation.

The study is cautious, therefore, with regard to the effects of training measures. In relation to women’s integration into the labour market, the report comes to a clear result:

Evidence from cross-national studies shows that the availability of childcare – particularly when it is subsidised and regulated with quality standards such as high staff-to-child ratio – is positively related to women’s employment.

A comparable effect can be assigned to paid maternity leave, while unpaid leave – such as in Canada – is less effective, because low-wage workers cannot always afford to take it.

Commentary

While the research dedicated to training programmes for low-skilled workers and unemployed persons proved to be rather disappointing, the study offers a good comparison of national policies regarding parental leave, childcare and flexible working arrangements in different European and non-European countries.

References and further information

GAO, Women and low-skilled workers. Other countries’ policies and practices that may help these workers enter and remain in the labor force, GAO-07-817 (684Kb PDF), June 2007.

GAO: Women and low-skilled workers. Efforts in other countries to help these workers enter and remain in the workforce. Statement of Kay E. Brown, Acting Director Education, Workforce, and Income Security Issues, GAO-07-989T (300Kb PDF), 14 June 2007.

For more information on these topics at European level, see the following reports on childcare: Employment developments in childcare services for school-age children and Out-of-school care services for children living in disadvantaged areas. See also the comparative reports on Combining family and full-time work (TN0510TR02) and Impact of training on people’s employability (TN0506TR01), as well as the information update ‘Training and employment performance’ (EU0410NU01).

For an overview of related practices at company level throughout Europe, see the report Working time flexibility in European companies and other reports on parental leave, early and phased retirement, part-time work and work–life balance from the European survey on working time and work–life balance.

Stefan Lücking, Technical University Munich

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