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Women’s employment in the context of the economic downturn (2009)

Women’s employment in the context of the economic
downturn

Prepared by:

Angela Barns
Therese Jefferson
Alison Preston

Women in Social & Economic Research (WiSER)

Curtin University of Technology

For:

Australian Human Rights Commission

April
2009


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Disclaimer:
The views expressed in this report are those of the
authors and do not necessarily represent those of the Australian Human Rights
Commission.

 


About WiSER

The Women in Social & Economic Research (WiSER) unit was founded in April
1999 in response to a growing void in the gender analysis of the economic and
social policy issues that confront Australian women. As an inter-disciplinary
unit WiSER brings together feminist and pro-feminist researchers and doctoral
students with backgrounds in economics, industrial relations, law, leadership,
management, social policy and social work.

Our high quality quantitative and qualitative research for the purpose of
informing policy formulation and business practice, is supported through various
research grants and consulting opportunities. Research findings are
disseminated through WiSER working papers, WiSER reports, peer reviewed journal
publications, conferences and public submissions.

As part of our commitment to engaging our community we also host a regular
series of community forums on topical issues. Further details on WiSER events,
research programs, reports and papers may be found at our website: www.cbs.curtin.edu.au/wiser

Contact Details
Dr Therese Jefferson
Senior Research Fellow,
WiSER
C/- Graduate School of Business
Curtin University of
Technology
PO Box U1987
Perth WA 6845

Tel: +61 8 9266 3724
Email: Therese.Jefferson@cbs.curtin.edu.au


Table of Contents

Foreword from Elizabeth Broderick

1. Introduction

2. Labour market trends in the economic downturn

2.1 Introduction
2.2 Background: Australia’s labour market immediately preceding the 2008 downturn
2.3 Australian labour market trends since the start of the economic downturn
2.3.1 Recent Data
2.3.2 Key References – Annotated
2.4 Gender breakdown of current trends in the labour market
2.4.1 Recent Data
2.4.2 Key References – Annotated
2.5 Industry trends by gender
2.5.1 Recent Data
2.5.3 Key References – Annotated
2.6 International comparisons
2.6.1 Recent Data
2.6.2 Key References – Annotated
2.7 Trends from previous recessions
2.7.1 Recent Data
2.7.2 Key References – Annotated

3. Women’s financial security and the economic downturn

3.1 The impact of the economic downturn on women’s financial security
3.1.1 Recent data
3.1.2 Key References – Annotated
3.2 The impact of the economic downturn over the lifecycle
3.2.1 Recent data
3.2.2 Key References – Annotated

4. Levels of women’s education and attainment compared with workforce participation

4.1 Women’s educational attainment and public spending on education
4.1.2 Recent Data
4.1.3 Key References – Annotated
4.2 The relationship between women’s education and workforce participation
4.2.1 Recent data
4.2.2 Key References – Annotated

5. The impact of paid parental leave on workforce participation and national productivity

5.1. Paid parental leave and women’s workforce participation
5.1.2 Recent data
5.1.3 Key References - Annotated
5.2 The impact of paid parental leave on the economy
5.2.1 Recent data
5.2.2 Key References - Annotated
5.4 The impact of paid parental leave on business
5.4.1 Recent data
5.4.2 Key References – Annotated
5.5 Impact of paid parental leave on the individual
5.5.1 Recent data

6. Flexible work arrangements

6.1 Time use?
6.1.1 Recent data
6.1.2 Key References - Annotated
6.2 Business and flexible workplace arrangements
6.2.1 Recent data
6.2.2 Key References - Annotated
6.4 Flexibility and caring responsibilities over the lifecycle
6.4.1 Recent data
6.4.2 Key References – Annotated

Conclusion

References


Foreword
from Elizabeth Broderick

It is with great pleasure that I present this research paper setting out key
issues related to women’s employment in the economic downturn, prepared by
the Women in Social & Economic Research (WiSER) unit at Curtin University.

The paper provides a very useful and timely insight into trends in
women’s employment since the start of the economic downturn in October
2008.

It is clear from the research that Australia must continue efforts to
progress gender equality, particularly at this critical time of economic
uncertainty.

While significant progress has been made with respect to women’s
education, it is concerning that women of child bearing age represent one of the
most under-utilised talent pools in the country. Women who want to combine
caring responsibilities with paid employment are being discouraged by inflexible
and family-unfriendly work structures and practices. This means that we are
failing to harness the full potential of women’s productive power in
Australia.

If we are to reap the full rewards that come from being an international
leader in women’s education and training, we must enable women to achieve
their aspirations in both their paid work and caring lives. This is
necessary for two key reasons. First, to enhance our international
competitiveness as we recover from the economic downturn. Secondly, to meet to
the challenges of skills shortages and increasing care demands arising from a
rapidly ageing population.

The Australian Government’s recent commitment to a national Paid
Parental Leave scheme is a good start. This should be the foundation of a suite
of policies and practices that support all Australians – women and men
– to balance their paid work and family responsibilities.

If we do support individuals to balance their paid work and caring
responsibilities we all benefit – not only women, but also men, children,
business and ultimately the economy.

Elizabeth Broderick
Sex Discrimination Commissioner
and

Commissioner responsible for Age Discrimination

June 2009


1. Introduction

“A nation’s competitiveness depends significantly on whether
and how it educates and utilises its female talent ...In the current global and
economic crisis it is more vital than ever that women’s participation does
not shrink but is in fact seen as an opportunity to make headway”
(Hausmann, Tyson and Zahidi 2009, 24).

The current economic crisis provides Australia with a unique opportunity to
develop and implement responsive policies to resolve the tensions and
ambiguities of women’s labour market participation and economic
well-being. As this report details, women’s employment is fraught with
inconsistencies, with barriers to participation and inequities in earnings a
major feature of the contemporary experience. Whether women’s economic
vulnerability in the current context is due to ongoing gender inequities and/or
the effect of the financial crisis is difficult to assess given the available
data. However, as Section 2 discusses, it is clear that women’s position
in low paid/casualised jobs and in sectors dominated by discretionary household
spending increases their vulnerability.

The issue of women’s marginal position in the labour market is linked
to a range of social, economic and political inequities in which women and men
continue to be treated within a ‘modified male breadwinner model’ of
reproduction. This is clearly evident in Australia’s contradictory
approach to women’s educational and employment opportunities. As is
discussed in Sections 3 and 4, Australia continues to make significant
investments in women’s educational opportunities. However, given the
barriers to women’s labour market participation, Australia fails to reap
the benefits of its investment.

The failure of the labour market to accommodate women’s experiences
throughout their life course is no more pronounced than for women aged between
25-44 years whose participation in the workforce significantly decreases due to
childbirth and childcare activities. As Sections 5 and 6 identify, the lack of a
universal scheme of paid parental leave and family friendly arrangements make it
difficult for women with young children to participate in the workforce in a
meaningful way. Women’s limited attachment through part-time or causal
work reinforces women’s role as caregivers rather than employees.

Australia can no longer afford to ignore or put off a comprehensive and
committed engagement with its female population. The elimination of the gender
wage gap and employment inequities are mandatory if Australia is to remain a
competitive and innovative player in the global economy. A universal,
government-funded scheme of paid parental leave, alongside the introduction of
broad-based flexible workplace arrangements within organisations, provide the
impetus basis for families to achieve work/life balance and are necessary
ingredients for Australia’s economic prosperity and productivity.


2. Labour
Market Trends in the Economic Downturn

2.1
Introduction

Australia is perhaps fortunate that it can date the
start of its downturn from the collapse of the Lehman Brothers investment bank
in the United States in September 2008. This was approximately a year later than
the start of the downturn in the United States and the United Kingdom and can be
attributed largely to the strength of the Chinese and other developing economies
and the demand for Australian commodities (Edey 2009). At this stage,
Australia’s downturn is also relatively moderate compared with of other
developed economies and our major export markets (Edey 2009; Stevens 2009).

The recent nature of Australia’s downturn means that few detailed data
are available to monitor how the economy is faring and this is particularly true
for specific labour market sectors. At this stage we have limited official data
that are relatively aggregated and relatively speculative predictions about
future labour market trends. The signals so far are limited and mixed.

2.2
Background: Australia’s Labour market immediately preceding the 2008
downturn

At July the 2008 labour market participation reached 65.4
percent, at the time comprised of a female participation rate of 58.5 percent
and a male participation rate of 72.3 percent (ABS 2009d, trend estimates).

Increases in the female participation rate were partly driven by increasing
demand for labour, but were also underpinned by demographic effects such as
changed social norms and an ageing population (Austen and Seymour 2006). At
October 2008, for example, women aged 45 or more accounted for 39.8 per cent of
all women in the labour force aged 20 plus. In 1991 the corresponding share was
24 per cent. The majority of these older women are engaged in part-time
employment.

There
was a sustained trend towards growth in the part-time labour market. The latter
reflects an employer preference for more flexible forms of labour and a growing
use of non-standard forms of employment (part-time, temporary, casual). In the
eight years to October 2008 part-time employment grew by 26 percent. By October
2008 more than two million women were employed part-time and more than 73
percent of all part-time jobs were held by women (ABS 2009d). This is closely
linked with the different concentration of men and women in different
industries. Retail trade, accommodation, cafes and restaurants and cultural and
recreational services are relatively feminised industry sectors and have high
rates of part-time employment. Employees in these sectors also receive
relatively low pay.

The conventional wisdom, backed by a large and growing research literature
suggests that part-time workers in low paid industries are likely to be among
the first casualties in an economic downturn (Seguino 2009). Not only are they
likely to lack negotiating power they are also likely to have relatively low
levels of accumulated assets to draw upon if they lose their jobs. The following
discussion looks at recent data on Australia’s labour force and considers
possible gendered outcomes.

2.3
Australian labour market trends since the start of the economic
downturn

2.3.1
Recent Data

Since September 2008 there have been six releases of
monthly labour force data from the Australian Bureau of Statistics (ABS), the
latest release covered the month of February. This is a relatively short lag
between the collection of data and the release of findings and provides one of
the most immediate sources of labour market information. Monthly trend estimates
for full-time and part-time employment, unemployment and unemployment are
provided in Table 1 below.

The key features of labour market indicators since September 2008 are
consistent with the patterns that are generally expected during an economic
downturn. There has been an increase in the unemployment rate from 4.3 percent
in September 2008 to 5.2 percent in February 2009, a participation rate moving
from 65.3 percent to 65.5 percent and a growth in part-time employment (up by
approximately 90,000) compared to a drop in full-time employment by
approximately 70,000.

Data relevant to wages and earnings is produced less regularly and the most
recent release covers the November 2008 quarter. The next release of official
data will not occur until May this year. Again, this means detailed information
of the effects of the downturn are yet to emerge. At an aggregate level, average
earnings continued to grow through the November 2008 quarter. Trend estimates
for all employees suggest that earnings grew by an average of 1.2 percent for
the quarter and 4.1 percent for the year (ABS 2009d). Such aggregated estimates
gloss over important differences between different labour market sectors, an
issue discussed in the next section.

Table 1: Selected Indicators of Labour Force Status – Jan 2008
– Feb 2009, Australia

 

Column 1
Month/year
Column 2
Employed full time
‘000
Column 3 Employed part time ‘000 Column 4 Employed total ‘000 Column 5 Unemployment rate- looking for full-time work
%
Column 6 Unemployment rate % Column 7 Participation rate %
Males
Jan 2008 4971.9 918.4 5890.3 3.3 3.6 72.8
Feb 2008 4994.9 897.3 5892.2 3.1 3.5 72.5
Mar 2008 4982.4 902.2 5884.6 3.6 3.9 72.6
April 2008 5001.0 890.3 5891.3 3.7 4.0 72.7
May 2008 4979.7 907.0 5886.7 3.7 4.0 72.5
June 2008 5018.4 889.5 5907.8 3.6 4.0 72.7
July 2008 5035.2 864.5 5899.7 3.5 3.9 72.4
Aug 2008 5048.4 857.9 5906.3 3.6 3.8 72.3
Sept 2008 5031.1 883.5 5914.7 3.7 4.0 72.5
Oct 2008 5032.5 882.1 5914.5 3.7 4.1 72.4
Nov 2008 5028.0 882.3 5910.3 3.9 4.2 72.3
Dec 2008 5018.0 888.1 5906.1 4.2 4.5 72.4
Jan 2009 4995.7 893.3 5889.0 4.5 4.8 72.3
Feb 2009 4964.6 907.6 5872.2 4.9 5.1 72.2
Females
Jan 2008 2675.4 2139.9 4815.2 4.6 4.7 58.3
Feb 2008 2706.3 2139.5 4845.8 4.5 4.3 58.4
Mar 2008 2707.3 2150.3 4857.6 4.5 4.3 58.3
April 2008 2703.7 2182.6 4886.3 5.0 4.5 58.8
May 2008 2712.3 2152.9 4865.2 4.5 4.6 58.5
June 2008 2691.7 2172.5 4864.3 4.7 4.6 58.4
July 2008 2731.1 2157.9 4889.0 5.0 4.8 58.8
Aug 2008 2715.2 2174.4 4889.5 4.9 4.5 58.5
Sept 2008 2705.5 2169.4 4874.9 5.0 4.7 58.4
Oct 2008 2688.4 2217.7 4906.1 5.3 4.8 58.7
Nov 2008 2702.1 2195.8 4897.9 5.3 4.9 58.6
Dec 2008 2662.3 2240.0 4902.3 4.9 4.5 58.3
Jan 2009 2722.3 2197.4 4919.7 5.1 4.7 58.6
Feb 2009 2699.6 2238.7 4938.2 6.0 5.3 59.0
Persons
Jan 2008 7647.3 3058.3 10705.5 3.7 4.1 65.4
Feb 2008 7701.1 3036.8 10738.0 3.6 3.9 65.3
Mar 2008 7689.7 3052.5 10742.2 3.9 4.1 65.4
April 2008 7704.7 3072.9 10777.6 4.2 4.2 65.6
May 2008 7692.1 3059.9 10752.0 4.0 4.3 65.4
June 2008 7710.1 3062.0 10772.1 4.0 4.3 65.4
July 2008 7766.3 3022.4 10788.7 4.1 4.3 65.5
Aug 2008 7763.6 3032.3 10795.9 4.0 4.1 65.3
Sept 2008 7736.6 3052.9 10789.6 4.1 4.3 65.3
Oct 2008 7720.9 3099.7 10820.6 4.3 4.4 65.4
Nov 2008 7730.1 3078.1 10808.2 4.4 4.5 65.3
Dec 2008 7680.3 3128.1 10808.4 4.4 4.5 65.2
Jan 2009 7718.0 3090.6 10808.7 4.7 4.8 65.3
Feb 2009 7664.2 3146.2 10810.4 5.3 5.2 65.5

(Source: ABS 2009d, 6202.0, Seasonally adjusted estimates)

2.3.2
Key References – Annotated

1. Edey, M. 2009. The
economic landscape in 2009. Address to Australian Industry Group Annual
Economic Forum.
March 4, 2009. Reserve Bank of Australia available from www.rba.gov.au

This speech gives a succinct overview of Australia’s economic position
in recent months and that of Australia’s major trading partners. It
provides figures and tables covering recent export and imports, US share prices,
global production and fiscal policy in selected major economies, terms of trade,
manufacturing index, business confidence, consumer sentiment, interest payment
ratios and loan approvals. The conclusion is that Australia will be affected by
international deterioration in economic conditions but is well positioned to
respond with expansionary economic policy.

2. OECD, 2009. World Economic Outlook Update 2009 Available from www.oecd.org.

This is a short publication (6 pages) which provides an update for the WEO
report released in October 2008. It provides a ready reference for projections
of growth for major economies.

3. Australian Bureau of Statistics. 2009d. Labour Force Australia. Catalogue 6202.0. Canberra: Australian Bureau of Statistics.

Catalogue 6202.0 represents a source regular up to date labour statistics. It
provides estimates of unemployment and labour force participation disaggregated
by gender and private/public sector. The ABS web site can be found at: www.abs.gov.au. Spreadsheets with labour market
statistics since 1978 are also available as part of the 6202.0 series.

4. Australian Bureau of Statistics. 2009c. Average Weekly
Earnings.
Catalogue 6302.0. Canberra: Australian Bureau of
Statistics.
Earnings data is released quarterly and the last available data
was released in November 2009. The next release, for the February 2009 quarter
will be released in May 2009. Estimates are provided in disaggregated form by
gender for full-time and part-time workers, for average weekly ordinary time
earnings and average weekly total earnings. There are breakdowns for average
earnings by industry and occupation. The key omission from the perspective of
this report is the lack of information about the number of hours worked by
part-time employees.

2.4
Gender breakdown of current trends in the labour market

2.4.1
Recent Data

Employment patterns differ by gender and much of this
difference relates to the proportion of men and women working in or looking for
full-time and part-time employment. Some employment indicators, disaggregated by
gender are provided in Table 1 above.

If we focus firstly on unemployment
among those looking for full-time work, in column 5 there are two key features.
Firstly, throughout 2008 the unemployment rate among women was higher than men.
Since September 2008, unemployment among men looking for full-time work has
grown at a faster rate than among women but at 4.9 percent it is well below
women’s rate of 6.0 percent. In terms of the overall unemployment rate
(which includes those looking for either full-time or part-time work, in column
6), a similar pattern is observable: women had a higher rate of unemployment
before the downturn. Higher rates of growth in unemployment among men mean that
both men and women are now experiencing similar levels of unemployment.

Secondly, labour force participation rates among men and women are moving in
opposite directions. Men’s participation rates have declined throughout
2008, from a high of 72.8 percent in January 2008 to 72.2 percent in February
2009. A decline in participation rates might be attributed to people
discontinuing their job search as they become discouraged in a labour market
with relatively fewer opportunities; this is known as the “discouraged
worker effect”. For example, people may decide to retire early or return
to education rather than seek employment. This type of pattern is typically
associated with a downturn in the labour market. It is noteworthy that
women’s participation rates have risen throughout the same period;
increasing from 58.3 percent in January 2008 to 59.0 percent in February 2009.
This is worthy of further comment.

The issue of women’s labour supply has always been complex, with
ambiguous findings and predictions (Birch 2005, provides a review of the
literature). However, rising participation rates are an outcome that contradicts
the discouraged worker effect in a declining job market and we can only
speculate on the possible causes. One possible reason is that women are entering
the labour market in an attempt to add to household incomes as men’s
labour market opportunities falter – labelled the “added worker
effect”. Whether this is related to household debt levels and the need to
meet ongoing commitments such as mortgage repayments is also open to
speculation. Previous research has suggested there are links between
women’s labour market participation and mortgage repayments (Birch
2005,72). Another reason might relate to rapidly falling asset values –
particularly superannuation accumulations. Women have lower average levels of
accumulated assets and these have been are rapidly declining in value; women may
have less opportunity to choose retirement as an option in the current climate.
The conclusion at this stage is that there are factors that are counteracting
the discouraged worker effect among women in the current economic downturn.

The full-time and part-time employment figures (column 2 and 3) provided in
Table 1 have been converted to percentage changes in part-time and full-time
work, by gender, in Table 2 below. The percentage changes provide a ready guide
to the shift away from full-time work to part-time work since from late
2008.

Table 2: Monthly change in full-time and part-time employment by gender,
Sept 2008- Nov 2009
Month/year Employed full time ‘000 Employed part time ‘000 Monthly change in full time employment % Monthly Change in part time
employment

%
Monthly
Change in total
employment

%
Males
Sept 2008 5031.1 883.5 -0.34 2.99 0.14
Oct 2008 5032.5 882.1 0.03 -0.17 0.00
Nov 2008 5028.0 882.3 -0.09 0.03 -0.07
Dec 2008 5018.0 888.1 -0.20 0.65 -0.07
Jan 2009 4995.7 893.3 -0.44 0.59 -0.29
Feb 2009 4964.6 907.6 -0.62 1.60 -0.28
Females
Sept 2008 2705.5 2169.4 -0.4 -0.2 -0.3
Oct 2008 2688.4 2217.7 -0.6 2.2 0.6
Nov 2008 2702.1 2195.8 0.5 -1.0 -0.2
Dec 2008 2662.3 2240.0 -1.5 2.0 0.1
Jan 2009 2722.3 2197.4 2.3 -1.9 0.4
Feb 2009 2699.6 2238.7 -0.8 1.9 0.4
Persons
Sept 2008 7736.6 3052.9 -0.3 0.7 -0.1
Oct 2008 7720.9 3099.7 -0.2 1.5 0.3
Nov 2008 7730.1 3078.1 0.1 -0.7 -0.1
Dec 2008 7680.3 3128.1 -0.6 1.6 0.0
Jan 2009 7718.0 3090.6 0.5 -1.2 0.0
Feb 2009 7664.2 3146.2 -0.7 1.8 0.0

(Source: ABS 2009d, 6202.0, Seasonally adjusted estimates)

The pattern among the youngest members of the workforce is somewhat different
from older workers. Among younger workers aged 15-19 years, there has been a
pattern of declining labour force participation by both men and women. Young
men’s participation declined from 59.6 percent in February 2008 to 56.9
percent in February 2009. Young women’s rates also declined from 60.7
percent to 58.4 percent over the same period (ABS 2009d). The causes of the
increase in labour force participation by women in general do not seem to be
affecting younger women to the same extent. This is also consistent with
previous studies (Birch 2005, 73) and debt levels and/or low accumulated wealth
appear to be consistent with this outcome although there are few data from which
to reach a clear conclusion.

Unemployment rates do not tell the full story of reduced opportunities in the
labour market. The Centre for Full Employment and Equity (CofFEE) at the
University of Newcastle and the Australian Bureau of Statistics publish
indicators which capture the degree of labour under-utilization in Australia.
Labour underutilization includes not only the unemployed, but also part-time
workers who wish to work more hours and discouraged workers who wish to work but
are not actively seeking employment. Labour underutilization is an important
measure because people are classified as ‘employed’ if they work one
hour a week. While those with very few working hours may not be unemployed they
may be very underutilized and unable to secure the working hours they need or
want in order to generate an adequate income. Table 3 below reports
CofFEE’s most comprehensive labour underutilization indicator, labeled
CU8.

Table 3: CofFEE CU 8 Labour Underutilization Measures Nov 2007 –Nov
2008
CofFEE
U8 %
CofFEE
U8 – males %
CofFEE
U8 – females %
Nov 2007 9.12 7.2 13.5
Feb 2008 8.81 7.1 12.8
May 2008 9.0 7.2 13.1
Aug 2008 8.91 7.0 13.4
November 2008 9.26 7.2 13.9

(Source: CU8 Measure of labour underutilization developed by Centre of Full
Employment and Equity, http://e1.newcastle.edu.au/coffee/.
Data is seasonally adjusted and rounded to one decimal place).

The CU8 indicator gives a dramatic picture of the extent to which there is a
gendered pattern of labour utilization. While men’s rate of unemployment
is growing relatively faster than women’s, high and growing
underutilization rates indicate that many more women than men are working fewer
hours of work than they would prefer. This can occur through full-time jobs
being converted to part-time jobs or the number of part-time hours being
reduced.

The Australian Bureau of Statistics also produces a measure of labour
underutilization and its November 2008 estimates are similar to those developed
by CoFFEE. In addition, the ABS estimates are broken down by age group, showing
that labour utilization is very much higher among young workers and for women
aged 25-54 years compared with men. These differences are consistent with a
reduction in working hours among those who are most highly casualised: young
people and women, particularly those with caring responsibilities.

Table 4: ABS Labour force underutilization rate by Age, November 2008
Males % Females % Persons %
15-24 18.9 22.4 20.6
25-34 7.5 11.0 9.1
35-44 6.0 12.5 9.0
45-54 5.5 11.0 8.1
55 and over 5.9 7.8 6.7
Total 8.4 13.2 10.6

(Source: ABS 2009a, 6105.0, trend estimates)

Internationally
comparable data on labour utilisation is not systematically compiled. However,
the United States Department of Labour produces a series of labour
underutilisations based on a similar concept to that used by the Australian
Bureau of Statistics. The data are not disaggregated by gender but show in
increase in labour underutilisation from 12.6 percent in October 2008 to 14.8
percent in February 2009 (BLS 2009, Table A-12).

Ahbaryartna and Lattimore (2006) refer to two measures to make international
comparisons of labour utilisation. The first, labour force participation, shows
that Australia’s participation rate was below that of nine OECD countries.
A second measure, average working hours per employee, shows Australia is placed
8th among OECD countries. The data are not disaggregated by gender
and, due to data collection differences, are more useful for comparing trends
through time rather than for comparisons between countries. While the two
measures are useful for comparing trends, their capacity to provide comparisons
of labour utilisation in different countries during the economic downturn are
very limited (Abhayaratna and Lattimore, 2006).

The significance of women’s labour participation and utilisation is not
restricted to the immediate impact on their individual and household incomes and
future earnings potential. Analysis by Access Economics suggests it has
implications for Australia’s output and productivity. Changes in the
percentage of women in the workforce, along with the number of hours they work
will significantly affect Australia’s capacity to meet the challenges of
an ageing population. If women’s workforce participation remains at
current levels and there is growth in the percentage of women employed
part-time, national income per capita is predicted to be 2.8 percent less than
the $76,000 predicted in the Commonwealth’s intergenerational report. On
the other hand, if women’s participation increases and the percentage of
women in full-time employment increases, then national income per capita is
predicted to increase by 4.4 per cent. For the predicted per capita income of
approximately $76,000 (in 2005/06 dollars) this represents a reduction of $2,123
compared with a potential increase of $3,385 (Access Economics 2006).

The latest available data indicate that men’s and women’s
earnings continued to grow in the November quarter 2008 (see Table 5). Average
total earnings for all men rose by 1.3 per cent and for women by 1.4 per cent.
The picture is slightly different if we consider the ordinary time earnings of
those employed full-time. Among full-timers, men’s ordinary time earnings
increased by 1.6 percent, compared with 1.3 percent for women. This continued a
trend that was evident throughout 2008; men’s full-time ordinary time
earnings increased at the same rate or faster than women’s. When part-time
workers and total earnings (rather than ordinary earnings) are considered,
growth in men’s and women’s earnings is more closely aligned.

The relatively higher growth in total earnings for women, compared with
full-time earnings for women suggests two possible developments. Either women
working part-time are increasing their working hours (and thus their earnings)
or their average hourly earnings are growing at faster rate than the average
weekly earnings of those working full time. Without more detailed data, it is
difficult to draw any conclusions. However, it would be unusual for rates of pay
among part-time and casual workers to grow faster than those for the full-time
workforce. This suggests that women employed part-time are working more hours,
while at the same time seeking even further hours and increasing their
participation rates. This is a pattern of outcomes, again suggesting that the
labour market experiences of part-time women workers are particularly consistent
with the added worker effect, in which women attempt to compensate for worsening
economic conditions by increasing their labour supply.

Table 5: Selected Average Weekly Earnings Estimates November 2008
Average Weekly Earnings, $ Males Females Persons
Full time adult ordinary time 1,243.00 1,032.20 1,164.90
Full time adult total 1,313.60 1,049.30 1,214.50
All employees total 1,101.70 720.10 911.30
Change November 2007 - November 2008, %
Full-time adult ordinary time earnings 5.7 4.7 5.2
Full-time adult total earnings 5.7 4.6 5.0
All employees total earnings 4.4 5.0 4.1
Change August 2008 – November 2008, %
Full time adult ordinary time earnings 1.6 1.3 1.5
Full time adult total earnings 1.5 1.3 1.4
All employees total earnings 1.3 1.4 1.2

(Source: ABS 2009c, 6302.0, trend estimates)

As is well known, women’s average earnings are lower than men’s
and this continued throughout 2008. November quarter ordinary time earnings
estimates for full-time employees were $1,243 for men and $1,032.20 for women,
giving a raw gender wage gap of 17 percent. Much of this gap is related to the
different industries in which women and men work and their patterns of work,
which is discussed further in the next section.

Available data give little reason to expect anything other than a broadening
in the gender wage gap during the economic downturn. As noted above, women are
more likely to experience underutilization in the labour market. Further, they
are relatively more reliant on minimum earnings decisions.

2.4.2
Key References – Annotated

1. Birch, Elisa R. 2005. Studies of the labour supply of Australian women: what have we learned? The
Economic Record
81 (252):65-84.

This is a relatively recent scholarly journal article which provides a
detailed and comprehensive review of Australian women’s labour supply.
Pages 72-73 are particularly interesting in the context of the current economic
downturn and discuss studies that suggest links between household mortgages and
women’s labour market participation.

2. Dandie, S and Mercante, J. 2007. Australian labour supply
elasticises: comparison and critical review
. Treasury Working Paper 2007
-04.

While we have not cited this report it provides a summary of the literature
that considers the complexities of women’s labour supply in response to
changing wage rates. The complexities arise because women’s labour supply
changes in response to their own wages and to that of others in the household,
particularly a partner’s earnings. The authors provide a clear summary of
the theoretical aspects of labour supply elasticity and a concise overview of
the relevant literature.

3. Centre of Full Employment and Equity, http://e1.newcastle.edu.au/coffee/

The CofFEE website contains a range of labour underutilization measures,
publications and comment. It provides additional insights into the labour
statistics produced by the Australian Bureau of Statistics.

4. Access Economics. 2006. Meeting Australia’s ageing
challenge: the importance of women’s workforce participation
. Report
by Access Economics Pty Ltd for The House of Representatives Sanding Committee
on Family and Human Services.

This report, cited above, provides dollar estimates of potential reductions
in Australia’s average per capita in income if women’s workforce
participation does not increase between 2006 and 2041. Increases in both the
percentage of women participating in the labour force and in the percentage
working full-time are required to ensure maximum increases in national
income.

5. Preston, A & Jefferson, T. 2007. Trends in Australia’s
gender–wage ratio. Labour and Industry 18(2): 69-84.

There are many studies into Australia’s gender wage ratio and its
possible causes and there are considerable lags between the availability of data
and production of scholarly journal publications. This article provides a
relatively recent analysis of Australia’s gender wage ratio, discussed
within the context of labour market decentralization. It emphasizes the
significance of wage setting mechanisms for sectoral changes in the gender wage
ratio.

2.5 Industry
trends by gender

2.5.1
Recent Data

The latest official release of industry specific data is
for the November quarter 2008. Table 6 provides a summary of the composition of
the workforce in different industry sectors, by gender and part-time/full-time
employment status. It shows the relatively high proportion of female, part-time
work in specific industries such as retail trade, accommodation, cafes and
restaurants, education, health and community services and cultural and
recreational services.

As discussed earlier, the latest earnings data covers the November quarter
2008 and therefore covers only the very start of the downturn. Given the
likelihood of a lag between changing economic conditions and effects on the
labour market, the lack of more recent data is a constraint on analysis.
However, by looking at changes in earnings for different industries over the
previous year, we can get an idea of the importance of industry sector for
men’s and women’s earnings and employment patterns.

Table 6: Composition of employment by industry, gender and full-time/
part-time employment status, November 2008
Industry (ANZSIC 1993) Male
Full-time %
Male
Part-time %
Female
Full-time %
Female
Part-time %
Total employees
(‘000)
Agriculture forestry and fishing 61.0 9.0 15.2 14.8 374.3
Mining 82.1 0.8 15.0 2.1 180.3
Manufacturing 68.6 5.2 18.8 7.5 1,066.9
Electricity gas and water supply 74.7 2.9 18.2 4.3 108.1
Construction 80.7 7.6 5.7 6.0 993.8
Wholesale trade 62.1 5.4 21.7 10.7 442.8
Retail trade 32.7 14.5 19.9 32.9 1,544.9
Accommodation, cafes and restaurants 26.6 16.2 23.6 33.7 512.2
Transport and storage 64.9 9.4 17.2 8.5 530.4
Communication services 60.4 7.2 21.1 11.3 197.3
Finance and insurance 43.7 4.0 39.7 12.7 380.1
Property and business services 46.9 6.8 27.8 18.5 1,295.6
Government administration and defence 42.2 3.1 40.2 14.5 485.0
Education 24.2 6.4 40.0 29.3 769.6
Health and community services 16.8 4.8 41.1 37.3 1,134.2
Cultural and recreational services 39.1 14.6 18.3 28.0 288.5
Personal and other services 42.2 7.6 28.8 21.5 413.5
All industries 46.8 8.0 24.9 20.3 10,717.5

(Source: ABS 2009a, 6105.0, original series Table 2.4)

Table 7, lists the changes in earnings for men and women employed full-time
in different industry sectors. There are seven industries in which women working
full-time received comparatively higher increases in weekly earnings than men:
electricity, gas and water supply, retail trade, finance and insurance, property
and business services, government administration and defence, health and
community services and cultural and recreational services. In three of these
industries, full-time women workers comprise less than 20 percent of the
workforce (electricity gas and water supply; retail trade; cultural and
recreational services). Three of the industries have gender wage gaps that are
considerably larger than the average of 17 percent, with higher increases for
women doing relatively little to address this disparity: (Finance and insurance
percent; Property and business services percent; Health and community services
percent). Government administration and defence stands alone as an industry in
which women did comparatively well in terms of wage increases for full-time
workers and in maintaining a smaller than average gender wage gap.

Of course, a key concern with these estimates is that they include only
full-time workers. Forty-four percent of women in the workforce work on a
part-time basis. The lack of available data to monitor their earnings and work
hours has been an ongoing concern for the Australian Human Rights Commission for
several years, a concern confirmed by commissioned research (Preston, Jefferson,
and Seymour 2006). A lack of appropriate, timely data can be considered a
particularly important omission in a context of individual, confidential
agreements and the need for evidence as a key input for implementing and
monitoring economic policy reform (Leigh 2009; Wilkie and Grant 2009). There are
strong arguments that major policy changes should be accompanied by data
collection that systematically monitors the costs and benefits of the policy.
This has not occurred in the area of labour market policy; data collection has
declined in both scope and regularity during a period of major legislative
change. We have little idea how the large number of part-time women workers and
rapidly increasing number of part-time men workers are faring in a rapidly
changing labour market. Economists are among the first to admit that efficient
markets rely on good information – an issue that appears to have been
overlooked in debates about labour market reform.

Table 7: Change in Average weekly earnings for full-time employees (%),
Nov 2007 – Nov 2008 and Average weekly ordinary time earnings for
full-time employees Nov 2008
Males Females
Industry % change in earnings Ordinary earnings
($)
% change Ordinary earnings ($)
Ordinary Total Ordinary Total
Mining 7.3 7.2 2,030.30 4.6 4.7 1,547.90
Manufacturing 7.0 5.6 1,133.40 4.6 5.5 983.30
Electricity gas and water supply 6.5 5.8 1,438.10 8.4 8.2 1,225.10
Construction 8.3 8.2 1,205.30 8.1 7.6 1,060.80
Wholesale trade 6.9 6.6 1,144.30 0.5 0.8 969.50
Retail trade 0.8 0.5 916.80 5.5 5.3 826.80
Accommodation, cafes and restaurants 2.4 2.7 876.80 -0.9 -0.3 775.10
Transport and storage 8.2 11.0 1,176.20 3.7 4.9 942.30
Communication services 1.1 0.3 1,244.20 0.9 0.4 1,093.90
Finance and insurance 3.2 3.2 1,716.10 6.2 6.1 1,169.30
Property and business services 5.2 4.4 1,415.50 9.1 8.8 1,076.40
Government administration and defence 4.4 4.8 1,269.20 5.5 5.4 1,176.50
Education 3.4 3.3 1,304.30 3.3 3.4 1,163.30
Health and community services 2.5 3.1 1,377.40 5.5 5.3 973.90
Cultural and recreational services 5.3 5.3 1,236.10 7.0 6.8 1,027.30
Personal and other services 8.5 7.8 1,213.00 4.3 4.2 972.20
All industries 6.1 5.9 1,244.10 4.8 4.8 1,032.00

(Source: ABS 2009c, 6302.0, original estimates)

In the absence of timely and comprehensive data, we are left to rely on
newspaper reports, other informal sources and past studies from which to infer
outcomes for labour market sectors. Predictions for the future of specific
industries and their employees are mixed. In recent months, there has been
significant press coverage given to the downturn and job losses in traditionally
male industries such as mining and heavy manufacturing.

National accounts and retail trade figures give the most recent picture of
economic change in specific industry sectors, although these do not necessarily
provide insights into specific labour market developments. For example, despite
job losses in the mining industry, the seasonally adjusted estimate for gross
value added to GDP by mining rose 0.4 percent in the December quarter 2008. This
possibly indicates that job losses in this industry were in areas focused on
future rather than current production. In contrast, manufacturing gross value
added fell by 4.7 percent, an outcome more line with media reports of job losses
in this sector (ABS 2009a, 5).

Data on retail sales has received considerable media attention due to the
effects of the Federal Government’s fiscal stimulus package at the end of
2008. Increased turnover of 3.8 percent in December 2008 and 0.2 percent in
January 2009 suggest some success in maintaining consumer spending (ABS 2009d).
At the same time however, December quarter seasonally adjusted measures of
household expenditure show declines in household expenditure on hotel, cafes and
restaurants (down 1.0 percent), clothing and footwear (down 1.3 percent),
alcoholic beverages (down 2.4 percent) and purchase of vehicles (down 1.2
percent) (ABS 2009d, 4). A full list of December quarter changes is provided in
Table 7

While the estimates in Table 7 cover a short period at the very start of the
downturn, they reveal an important issue: the timing and sources of changes in
employment are likely to be very different for men and women and these
differences have significant policy implications. Women are over represented in
industries in which discretionary spending is an important driver of employment
such as retail trade, accommodation, cafes and restaurants and personal and
other services. The workforces in these industries are also heavily casualised,
making reductions in working hours relatively easy to implement. Women are also
over represented in services sectors that depend heavily on Government
expenditure, such as government administration, education and health and
community services.

Internationally, the responses of governments to the economic downturn have
been to stimulate spending on physical infrastructure and to cut government
spending on services. This response has been mirrored in Australia. The focus on
infrastructure is apparent in a summary of the Federal Government’s
economic stimulus plan:

“In getting on with the job, the Australian Government is funding:

  • A new 21st century school library, multipurpose hall, or classroom
    modernisation for each primary school in Australia.
  • New science labs or language centres for 500 secondary schools.
  • Grants of up to $200,000 for individual school communities to fund
    much-needed maintenance.
  • Ceiling insulation for around 2.7 million Australian homes.
  • Increased rebates for solar and heat pump hot water systems.
  • 20,000 new social housing dwellings.
  • 802 new houses for the Australian Defence Force.
  • Urgent maintenance to upgrade around 2,500 vacant social houses.
  • An additional 30 per cent tax deduction for small and general businesses
    buying eligible assets. 
  • 350 additional projects in the Black Spot Program
  • Installation of around 200 new boom gates at high risk rail crossings.
  • $650 million funding boost for local community infrastructure and
    maintenance on Australia’s national highways.
  • One off cash payments to eligible families, single workers, students,
    drought affected farmers and others.
  • If you earned less than $100,000 in the 2007-08 financial year and paid tax
    you could be eligible for a tax bonus payment of up to
    $900.”

From: http://www.economicstimulusplan.gov.au/theplan.htm

Possible cuts to government spending have received less attention but are a
stated policy in Western Australia where the Premier has called on all
government departments to cut their spending by three percent.

The gender implications of these policies are twofold. Firstly, the economic
stimulus plan is heavily focused on expenditure in areas where most employees
are men. Women are under represented in industries that are likely to benefit in
the short term from expenditure on construction and maintenance programs.
Expenditure programs which invest in social as well as physical infrastructure
enhance gender equity as well as providing long term dividends. Investment in
early childhood education is one example of a “socially responsible growth
industry offering consistently high returns” (Folbre 2009). Similar
approaches can be adopted to ensure that when we upgrade our physical
infrastructure we are also investing in the skills and expertise of the staff
who will utilise the new halls and classrooms.

Secondly, when we reduce key areas of public expenditure such as health and
community services, we not only reduce employment opportunities for women but we
typically increase the need for unpaid household care. This type of work is
disproportionately undertaken by women and has important implications for their
labour force participation and long term financial security, an issue discussed
more fully in the following section on financial security (Preston and Austen
2001; Jefferson and Preston 2005; ABS 2008a).

2.5.3
Key References – Annotated

1. Australian Bureau of
Statistics. 2009a.
Australian Labour Market Statistics, Catalogue
6105.0.
Canberra: Australian Bureau of Statistics.
This publication is
released quarterly and combines labour market statistics from a number of
different sources (outlined in each report). The data is reasonably
comprehensive and covers issues of both employment levels and earnings. Data is
available for industry and occupational sectors and for age groups by gender. In
common with other publications, there are no data on working hours by part-time
workers which limits analysis of labour market trends for almost half the women
in the workforce. There is a small lag which reduces its immediacy in very
rapidly changing economic contexts such as the current downturn. The most recent
release was in January 2009 and it contains data up to 11 December 2008. The
next release is due in April 2009.

2. Australian Bureau of Statistics. 2009e. Retail Trade. Catalogue 8501.0. Canberra: Australian Bureau of Statistics.

Retail trade statistics provide one of the regularly available sources of
data that are used as an indicator of economic activity among consumers.
Estimates are released on a monthly basis and include measures of turnover for
specific sectors such as food retailing, clothing and soft goods, cafes,
restaurants and take away food, department stores and household goods. The
retail industry is a major employer of women and part-time workers and this data
provides some indication of likely changes in employment.

3. Austen, S. Jefferson, T. Preston, A and Seymour, R. 2008. Gender
pay differentials in low-paid employment.
Report Commissioned by the
Australian Fair Pay Commission. Melbourne: Australian Fair Pay Commission.
Available from www.fairpay.gov.au.

This report examines patterns of low pay in different industries and
occupations. It finds that gender wage gaps are lower among low paid workers and
this is partly due to the role played by minimum wage decisions in ensuring a
floor for workers with relatively low negotiating power.

4. Preston, A, Jefferson, T and Seymour, R 2006. Women's pay and
conditions in an era of changing workplace regulations: towards a "Women's
Employment Status Key Indicators" (WESKI) database
, Human Rights and Equal
Opportunity Commission, National Foundation for Australian Women and the Women's
Electoral Lobby, Sydney.

We have included this reference because of the ongoing lack of necessary data
to provide analysis of women’s employment patters. The lack of data
covering part-time working hours is particularly concerning.

5a. Leigh, A. 2009. What evidence should social policymakers use? Economic Roundup 2009 (1): 27-44.

5b. Wilkie, J and Grant, A. 2009. The importance of evidence for
successful economic reform. Economic Roundup 2009 (1):45-55.

Both of these articles lend weight to arguments for the need for reliable,
current data as a basis for implementing and monitoring economic policy.
Economic Roundup is a Treasury publication and these articles appear in the same
issue, contributing important discussions on the evidence based policy

6. Economics of Crisis website 2009. http://www.economicsofcrisis.com

This website contains a discussion summarizing the “Gender Effects of
Economic Crisis” and a large number of links to previous research. Some of
the information is not directly relevant to Australia, however it provides
insights into the gendered nature of specific policy responses to economic
crises.

7. Folbre, N. 2009. The Ultimate Growth Industry. Available
from http://economics.blogs.nytimes.com.

Folbre is a high profile, widely respected feminist economist in the United
States. This informal, two page discussion provides arguments for investment in
high quality early childhood education. While Folbre has authored a long list of
scholarly publications, this short discussion is notable because of its
immediacy and relevance in the context of the current economic downturn.

2.6 International
comparisons

2.6.1
Recent Data

Due to differences in data collection methods and
definitions, international comparisons of economic data can be only a very
approximate indicator of comparative performance. However, within the
constraints of data of comparability, Australia appears to be faring relatively
better than a range of other developed economies and GDP and unemployment
estimates are favourable compared with averages for the European Union, G7 and
nations such as the United States and United Kingdom. As the Assistant Governor
to the Reserve Bank of Australia has noted, trading links with strongly growing
Asian economies delayed the start of economic downturn in Australia (Edey
2009).

The outlook for Australia remains a cause for concern but is also relatively
favourable compared with other developed economies (see Table 8). The IMF
projects that GDP in wealthier countries will decline by 2.0 percent in 2009 and
reach growth of 1.1 percent in 2010, comparable estimates for the United States
and United Kingdom are -1.6 percent and -2.8 percent (2009) and 1.6 percent and
0.2 percent (2010). In contrast, Australia’s projected decline in GDP is
projected to be -0.2 percent in 2009 returning to growth of 1.8 percent in 2010
(OECD 2009).

Australia’s relatively favourable economic indicators are not matched
by indicators on gender and labour market outcomes. Notwithstanding
Australia’s relatively stronger growth in female labour force
participation (compared to male participation) since 2000, there remained a
significant gender participation gap equal to 16 percent at October 2008. This
is above that of other OECD countries. In Canada, for example, the corresponding
gap is around 12 percent while in Sweden it is significantly lower equal to 5
percent (World Economic Forum 2008). A key area of difference between
Australian and other OECD countries concerns female participation amongst women
aged 35-44. Relative to other countries women in this age group are more likely
to be employed part-time.

Table 8: Change in GDP and Unemployment Rate – Selected Countries
2008
Change in GDP
4th Quarter 2008 - %
Unemployment Rate December 2008
Australia -0.5 4.5
Austria -0.2 4.0
Belgium -1.7 7.1
Canada -0.8 6.6
Czech Republic -0.9 4.7
Denmark -2.0 4.0
Finland -1.3 6.6
France -1.2 8.2
Germany -2.1 7.2
Greece 0.3 27.5
Hungary -1.2 8.5
Ireland 11.5 8.3
Italy -1.9 ..
Japan -3.2 4.3
Korea -5.6 3.3
Luxembourg 10.5 4.9
Netherlands -0.9 2.8
New Zealand 1-0.4 4.6
Norway 1.3 3.0
Poland 0.3 6.6
Portugal -1.6 7.9
Slovak Republic 2.1 9.5
Spain -1.0 14.3
Sweden -2.4 7.1
Switzerland -0.3 3.6
United Kingdom -1.5 36.2
United States -1.6 7.2
European Union -1.5 7.5
Euro area -1.5 8.1
G7 -1.8 6.6

(Source: OECD Key Economic Indicators, www.oecd.org. 1. 3rd quarter estimate;
2. September 2008 estimate; 3. November 2008 estimate).

Internationally, there is no uniform pattern of the impact on women’s
employment. ILO analysis suggests that the variation on the gendered impact of
the economic downturn depends on both the industry structure of specific
economies as well as their particular policy responses and social welfare
programs. Further, it is difficult to distinguish between issues of ongoing
gender inequality and those that might be attributed to the current crisis (ILO
2009, 20).

Making predictions about the likely effects of a global economic downturn is
a risky exercise. While forecasts vary, there appears little reason to expect
that the burden should not fall on the most vulnerable members of our workforce:
those on low pay and with insecure employment tenure.

2.6.2
Key References – Annotated

1. Seguino, S. 2009. Written statement on Interactive Expert Panel: The gender perspectives of the
financial crisis
. Fifty-third session of the Commission on the Status of
Women. March 2-13, 2009. New York. United Nations Commission on the Status of
Women.

This short document is notable for its immediacy and relevance. It summarises
key issues for both developing and developed economies. While it contains few
quantitative data it provides a summary of key issues that should be considered
within specific economic contexts.

2. Edey, M. 2009. The Economic Landscape in 2009: Address to
Australian Industry Group Annual Economic Forum
. March 4, 2009. Reserve Bank
of Australia.

This address has already been mentioned in section 1.5.2 but is added here
because of its relevance to discussing Australia’s economic prospects in
an international context.

3. International Labour Organization. 2009. “Global employment
trends for women”. ILO: Geneva.

This report is notable for including both a gendered anlaysis of employment
trends and international data. Its analysis is limited however by the limited
availability of appropriate data. The authors note that while gender analysis of
economic trends often relies on investigating employment patterns by sector,
recent data from the United States suggests that “the sectoral
distribution of male and female employment is not necessarily the most important
factor in the analysis of the economic crisis”. Initial indicators suggest
that occupational distribution and employment contractual arrangements may be
significant. Again, however, data are required to investigate these
possibilities.

2.7 Trends
from previous recessions

2.7.1
Recent Data

Two factors make the likely gender impact of this
recession particularly difficult to assess. Firstly, the lack of detailed and
timely data hampers analysis of the economic downturn and related policies in
much the same way as it has constrained analysis of other major economic and
social policies such as recent industrial relations legislation. Secondly, the
limited data that are available suggest that there are gendered patterns of
workforce participation with women’s labour force participation rates
rising alongside increases in unemployment and labour underutilization. As
discussed above, it might be the case that household debt levels and very rapid
declines in asset values mean that the context in which employment decisions are
being made is different in very important ways from previous recessions.

An analysis of international literature on past recessions has identified the
following key gender issues:

  • Unemployment is typically higher among women;
  • Women’s concentration in least secure forms of employment makes them
    more vulnerable to dismissal;
  • “Male breadwinner” attitudes treat women as secondary wage
    earners, resulting in policies that have gendered impacts and long term
    implications for women’s financial security;
  • Women become increasingly responsible for caring roles due to cuts in public
    spending on health and community services resulting in either reduced services
    or higher prices;
  • Women are more vulnerable to escalating crime and violence if economic
    crisis erodes social cohesion (Tutnjevic 2002).

Much of the research into the gender implications of recession has
focused on developing economies, reflecting greater levels of poverty and lower
recognition given to women’s rights. However, to translate these
experiences to the Australian situation may overstate and/or misrepresent the
extent and nature of the risks that Australian women are likely to face.

What we can see is that advances made in securing gender equity can be easily
eroded, even during boom periods. WorkChoices, introduced during a period of
economic prosperity in Australia, contributed to the normalising of poor
employment practices in some industries and the dampening of employee voice. The
lack of protection for unfair dismissal left many workers vulnerable and open to
dismissal for querying their wages and conditions of employment (Charlesworth
and McDonald, 2007). In the boom period there were cases of employees preferring
to quit their job rather than risk being dismissed for querying conditions
(Jefferson et al 2007). The economic downturn removes this option and leaves
vulnerable workers even more at risk.

2.7.2
Key References – Annotated

1. Tutnjevic, Tamara. 2002. Gender and financial/economic downturn. Geneva: International Labour Office.

The publication date on this on this report belies its relevance to the
current economic downturn. Many of the gender issues likely to arise during an
economic downturn are discussed in this report and it provides a ready reference
of previous analyses undertaken internationally. A relatively large proportion
of the report focuses on developing economies where some of the most pressing
issues differ from those that might be most important in developed
economics.

2. Elton, J, Bailey, J. Baird, M. Charlesworth, S. Cooper, R. Ellem, B.
Jefferson, T. McDonald, F. Oliver, D. Pocock, B. Preston, A and Whitehouse, G.
2007.
Women and WorkChoices: impacts on the low pay sector. Centre
for Work + Life, Hawke Research Institute for Sustainable Societies.
Adelaide: University of South Australia.

This report summarises a series of qualitative study undertaken across
Australia to examine the experiences of women in low paid employment during the
introduction of significant legislative change to Australia’s workplace
regulations framework. The findings again emphasised the need for comprehensive,
representative data that allowed detail investigation of changes in employment
conditions and wages. The experiences of the participants suggested that there
is a significant need for clear information about minimum wages and conditions
among both employers and employees. The study was undertaken during an economic
boom in Western Australia and in that context some women spoke of changing
employment in preference to addressing concerns about wages and conditions in
their current job. This is a potential area of concern as the economic boom
finishes and there is less opportunity to change
jobs.
Women’s
financial security and the economic downturn

 


3. Women's Financial Security and the Economic Downturn

3.1
The impact of the economic downturn on women’s financial
security

3.1.1
Recent data

Economic security may be seen as deriving from income,
access to shared resources (usually within households) and accumulated assets.
In addition, the social security system provides a safety net. The following
discussion considers each of these issues in turn.

Income
As discussed above, women’s concentration in part-time
work means that income is less secure and is likely to vary considerably in
response to reduced working hours. Current labour underutilization measures
suggest this is a larger problem among women. There is a lack of data to compare
working hours among part-time workers before and after the current downturn. As
discussed earlier, there is a substantial literature demonstrating gender
earnings gaps; the latest earnings estimates indicate a raw gender gap of 17%
between men and women working full time. Detailed data for analysing the
possible causes of this gap are produced less frequently. Analysis of data from
May 2006 demonstrates links with institutional factors such as methods of wage
setting and the prevalence of part-time work (Preston and Jefferson 2007).

Wealth
Information on wealth holdings is generally collected and
analysed for households rather than individuals (see for example Australian
Bureau of Statistics 2007 Catalogue 6554.0). In addition, data collection on
wealth holdings is relatively irregular, making it difficult to determine
patterns of wealth holdings by gender and macroeconomic conditions. It is
relatively clear that lone parent households, mostly headed by women, have the
lowest wealth accumulations (Headey, Marks, and Wooden 2005, 169).

Relatively detailed data is available for superannuation balances. The median
account balance for women in 2007 was $18,489, compared with men’s median
of $31,252 (ABS 2008a, 80). This is likely to be an outcome of both
women’s lower levels of superannuation coverage and lower contribution
rates. It is estimated that among those with less than $40 per week in
superannuation contributions, 58.1% are women (ABS 2008a, 86). Women are also
more likely to cite lack of affordability as a reason for not making personal
contributions to a superannuation scheme: 32.2% of women give this reason
compared with 27.5% of men. Men are more likely than women to state that they do
not make contributions to superannuation because the have other investments;
5.6% of men give this reason compared with 3.7% of women (ABS 2008a, 87).

Data are unavailable to examine gender changes in patterns of wealth
accumulation during the economic downturn. However, it is likely that there will
be a reduced capacity to accumulate wealth among all those on relatively low
incomes, a group in which women are over represented.

Access to shared resources
It has sometimes been argued that
women’s individual income and wealth are not necessarily a good indicator
of their access to economic resources because they can access shared household
resources. Households can redistribute income among members and alleviate the
effects of low income earning capacity by one or more members. In this context
it can be noted that low income earners do not necessarily live in households at
the bottom of the income distribution; for example, many low-wage earners are
married women whose earnings contribute less than half of the family income
(Richardson 1999).

The extent to which Australian households pool their resources is difficult
to establish from available research. It has been argued that the hypothesis
that households engage in an equal sharing of resources can not be disproved
(Bradbury 1996). There is a diverse body of theoretical and empirical literature
from the 1990s suggesting that equal sharing of resources has been assumed
rather than demonstrated (some examples include Bergmann 1995; Browning and
Lusardi 1996; Browning 2000, 1995; Singh 1997; Pahl 1995; Lundberg, Pollack, and
Wales 1997). Theoretical and empirical research suggests that equal sharing is
more likely to occur when partners have roughly equal bargaining positions
deriving from similar labour market opportunities and earnings (see for example
Rainer 2008; Pollack 1994).

3.1.2
Key References – Annotated

1. Bergmann, B. 1995. Becker's theory of the family: preposterous conclusions. Feminist
Economics
1 (1):41-50.

This article appeared in the first issue of the scholarly journal Feminist
Economics.
It is a well known critique of the ways in which orthodox
economics can be used to justify existing divisions of labour within households
and the workforce. Becker, a Nobel prize winner in economics, is particularly
well known for his application of neoclassical economic theory to issues of the
division of labour. Bergmann’s is also very well known, especially amongst
those with an interest in feminist economics and this is one of her frequently
cited works. It is particularly relevant in discussions that assume that
households pool and equally share their resources.

2. Headey, B. Marks, G and Wooden, M. 2005. The structure and
distribution of wealth in Australia. Australian Economic Review 38.
159-175.

As noted above, this article focuses on the distribution of wealth among
households rather than individuals. Its capacity to give a gender perspective on
wealth holdings is therefore limited. It does however give a reasonably up to
date picture of the structure of wealth holdings and debt by Australian
households. It also notes the very limited wealth held by sole parent
households, predominantly headed by women.

3. Lundberg, S. Pollack, R and Wales, T. 1997. Do husbands and wives
pool their resources? evidence from the UK child benefit. Journal of Human
Resources
32 (3):463-480.

There are relatively few opportunities for comprehensive data collection on
the allocation of resources within households. Lundberg and Pollack are
prominent theorists on the issue of intrahousehold allocations of resources.
This empirical study provided convincing evidence that households’ use of
social security payments differs depending on whether they are paid to men or
women partners in a household.

4. Rainer, H. 2008. Gender discrimination and efficiency in marriage:
the bargaining family under scrutiny. Journal of population economics 21:305-329.

This is a highly theoretical article that uses mainstream economic modelling
techniques to examine bargaining for resources among household members. It is
notable for its currency and as an example of the increasing acceptance of
“non cooperative” household bargaining within mainstream economics.
Few theorists with an interest in the allocation of household resources would
unquestioningly assume the “equal sharing” approach implicit in
Becker’s analysis. This is important in discussions of women’s
earnings and wealth holdings.

3.2
The impact of the economic downturn over the lifecycle

3.2.1
Recent data

It is well established that women’s lower incomes
over the life cycle result in lower accumulations of assets. Different methods
have been applied to estimating superannuation accumulations but all show a
significant gap between men’s and women’s accumulations (Jefferson
2005). It is estimated that among the baby boomer age group women will spend
approximately 35% less time in the labour force than men and that this will be
reflected in superannuation accumulations up to 35% lower than men’s.
Published ABS superannuation estimates do not disaggregate accumulations by age
and gender. However, among employed persons who have previously retired and then
returned to work, 42.3% of women, compared to 35.6% of men state that this is
due to financial need.

Estimating the effects of the current economic downturn on women’s
earnings and savings over the life cycle requires dedicated research which has
not been carried out to date. However, the likely outcomes are not difficult to
infer: decreases in earning capacity now will have implications for access to
resources in later life. Lower superannuation accumulations among women are
widely recognized and the issue is largely one of policy priorities.

3.2.2
Key References – Annotated

1. Australian Bureau of Statistics. 2008a. Employment arrangements,
retirement and superannuation Australia.
Catalogue 6361.0. Canberra:
Australian Bureau of Statistics.

Retirement and superannuation data are collected and published sporadically;
data in this publication was collected in 2007 and the previous collection was
in 2000. It represents the latest release of national data on superannuation
accumulations.

2. Preston, A and Austen, S. 2001. Women, superannuation and the SGC. Australian Bulletin of Labour 27 (4):272-295.

This article uses a small number of hypothetical paid/unpaid work profiles to
demonstrate the effects of the timing and duration of breaks from paid
employment on superannuation accumulations. While the article is published in a
scholarly academic journal, its approach is relatively easy to understand.

3. Jefferson, T. 2005. Women and retirement incomes in Australia: a
review. Economic Record 81 (254):273-291.

This article provides an overview of Australian studies of women and
retirement incomes. It concludes that the diverse range of methods used to
estimate women’s retirement incomes all lead to similar conclusions about
a relatively lower access to resources in older age than men.

4. Jefferson, T and Preston, A. 2005. Baby boomers and Australia's
other gender wage gap. Feminist Economics 11 (2):79-100.

In 2005 Feminist Economics produced a special issue on gender and ageing.
This article was the Australian contribution to the issue and provides gender
estimates on the retirement incomes of Australian men and women of the baby
boomer generation. It concludes a gender gap of at least 35% is likely among
retiring baby boomers.


4. Levels
of women’s education and attainment compared with workforce
participation

4.1
Women’s educational attainment and public spending on
education

4.1.2
Recent Data

In 2007/08 Australia spent $66bn on education or 5.8 per
cent of GDP (ABS 2009). The proportion spent is on par with public and private
expenditure in Canada and the UK, but below that in countries such as New
Zealand, Sweden, France and the US. Data are not available disaggregated sex,
but it would be fair to conclude that at least half (if not more) of this
expenditure was spent educating women.

Table 9: Public and Private Expenditure on Education as a Share (%) of
GDP in 2005
Australia Canada France Greece Italy Japan Korea (Republic) New Zealand Sweden UK US
5.9 5.9 6.1 3.4 4.9 4.8 7.2 6.9 6.7 5.9 7.4

(Source: ABS 2008, 4102.0, Data Cube. Table 7: International comparisons:
Educational participation (a) and expenditure. Released 23 July 2008).

When compared to young men, young women’s participation in high school
and undergraduate level education exceeds that of young men. In 2007 the
Apparent Retention Rate (ARR)[1] was
equal to 80.1 per cent for women and 68.8 per cent for men (a gap of 11.3
percentage points) (ABS, 2009). Since the time of the last recession (1991/2)
young women’s retention in high school has consistently been around 11-12
percentage points above that for young men (Preston and Burgess, 2003). The
high female ARR to Year 12 has, in turn, contributed to a significant increase
in the number of female higher education students. Much of the increase occurred
during the 1980s, with women’s participation continuing to grow from there
(see Figure 1 below).[2] By 1996
women comprised 54.3 per cent of all university students. Their share has been
relatively constant at this level since then (see Table 10).

Table 10: Gender Characteristics of University Students, 1996-2003
  1996 1997 1998 1999 2000 2001 2002 2003
Females 54.3% 54.4% 54.7% 55.0% 55.2% 55.0% 54.4% 54.4%
Males 45.7% 45.6% 45.3% 45.0% 44.8% 45.0% 45.6% 45.6%

(Source: http://www.universitiesaustralia.edu.au/documents/publications/stats/Students.xls Table C.1 Student Characteristics: 1996 – 2003).

Figure 1: Participation in Higher Education by Sex 1981-2001,
Australia

Figure 1: Participation in Higher Education by Sex 1981-2001, Australia

(Source: ABS 2003a - 42300_topic23.xls),

As education levels have increased so too has the overall share of degree
holders in the workforce. In keeping with the education trends discussed above,
by 2001, across all employees, there were more female than male degree holders
in the workforce. Just under a fifth (19.4 per cent) of all employees were
graduates, 54 per cent of whom were
women.[3]

4.1.3
Key References – Annotated

1. Australian Bureau of
Statistics
, Education and Training Indicators. Australian Social Trends
2009
. Catalogue No. 4102.0.
41020_Education_and_Training_Indicators_2008.xls. Available from
http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/LookupAttach/410…

The ABS Australian Social Trends presents statistical analysis and commentary
on a range of social issues. There are eight chapters including one on education
and training. A set of summary statistical tables complement each chapter, with
the Education and Training indicators providing a national summary of key
indicators from 1997 to 2007. The information is also disaggregated at the State
level. International comparisons are also available.

2. Preston, A and Burgess, J. 2003. Women’s work in Australia:
trends, issues and prospects. In Women and Work: Research & Policy
Issues, A Special Issue of the Australian Journal of Labour Economics
. A.
Preston and J. Burgess. Eds. 6(4): 497-519.

This article is an introductory article for a special issue of the Australian
Journal of Labour Economics on women and work. It contains a broad overview of
women’s labour market status at the time, including analysis of their
participation in education. Subsequent sections explore women’s
participation in education.

4.2
The relationship between women’s education and workforce
participation

4.2.1
Recent data

Clearly assessing whether or not there is a value (a
return) from an investment in women’s education is a complex task and
would include analysis of their productivity contribution (eg. to GDP through
their participation in employment) and broader social effects (such as
contribution to education of other family members, health etc.).

In terms of a more narrow economic analysis, focused on employment and
workforce participation, it is an undisputed fact that women’s
participation in the labour market is positively correlated with their
participation in education. Increased participation in education does influence
subsequent labour market participation. As Austen (2005, 7) notes, “women
with a degree are much more likely to work at each stage of the life
course”. Austen’s calculations using the 1997 Negotiating the Life
Course Survey (NLCS) data show, that 35.1 per cent of the sample of women with
degrees spent more than half of their time out of the labour force between the
ages of 26 and 30. The corresponding share for women without degrees was 50.7
per cent. Austen notes that this difference persists into their late 30s.

Women’s entry into education and subsequent participation in employment
has played a critical role in boosting aggregate demand and overall living
standards. On the supply side their participation has widened the labour market
pool with some sectors such as the resources sector specifically targeting women
as a means of addressing their persistent skills shortages (Minerals Council of
Australia and Office for Women, 2007). Indeed, in some highly feminised sectors
(such as teaching, health, retail) their participation is critical. An analysis
of labour market segmentation data shows that women and men are not equally
substitutable in the labour market. Women, for example, account for 80 percent
of all employees in the Health and Community Services Sector (ABS, 2008c -
original series, Table 2.4). Of the 888,000 women in this sector, 415,000 (or
47 percent) work part-time.

What is in doubt is whether or not we are making the most of our investment
in women’s education and training. Are we maximising the return on
investment? Analysis of participation patterns and gender wage gaps would
suggest that we’ve got room for considerable improvement here.

Recent work by Jefferson and Preston (2005, 91) estimated that, over a
persons working life men will accumulate an average of 39 years of work
experience while women will work for a total of 25 years. Since modelling this
in 2002 there has been a shift away from full-time work towards part-time work,
particularly in the key child-rearing years and amongst older workers (see
Figure 2). This will have a dampening effect on women’s participation over
the life course.

Figure 2: FT Employment as % of Total Employment, by Age and Sex,
1981-2006

Figure 2: FT Employment as % of Total Employment, by Age and Sex, 1981-2006
(Source: ABS 2007 4102.0, supercubes lm8.srd).

It is beyond the scope of this analysis to explore in depth the reasons for
the shift towards part-time work. It reflects, in part, the modified
male-breadwinner model that Australia has adopted to balance work and family
commitments. In this modified model women are primarily responsible for care
giving and do so by engaging in part-time work (Sharp and Broomhill 2004). It
also reflects, in part, a shortage of child-care places, the expense associated
with paying for child-care and a demand on the part of employers for a more
flexible labour force (which shows up in part-time and casual employment
statistics).

Unless this part-time work is of equal quality to work in the full-time
sector (and there is a wealth of evidence to suggest it isn’t), this shift
towards part-time work will negatively impact on Australia’s growth
potential. Aside from affecting demand, it results in a loss of experience.
Furthermore, the constrained set of part-time employment opportunities means
that women are underutilised relative to their capacity and potential. There is,
for example, a dearth of part-time jobs in senior and professional capacities
(the exception being professional jobs in teaching and nursing).

Numerous reports have highlighted the adverse effects on careers that result
from the pursuit of part-time work in careers such as law and banking. In the UK
the Equal Opportunities Commission have referred to this as the ‘hidden
brain drain’ (EOC, 2005). The EOC research identified 5.6 million
part-timers who were working below their potential. They defined the latter as
people “...who had previously held jobs that used a higher level of
qualifications or skills or involved more management or supervision, and/or say
they could easily work at a higher level” (EOC, 2005, 5).

The significance of this hidden brain drain and adverse effects on
productivity also shows up in their earnings. Research on pay shows that
part-timers earn around 8 per cent less per hour than their full-time equivalent
counterparts (Preston, 2003). Research also shows that the gender pay gap
widens across the pay distribution. Amongst low paid earners the gap is around
10 per cent, rising to 25 per cent amongst high paid earners (Miller, 2005,
413). The result reflects the glass ceiling effect and is reflective of a lower
rate of return to education and training for females as compared to males. The
latter will arise through discrimination and through, as noted, the sorting of
women into jobs which require fewer skills and qualifications than they actually
have.

There is further evidence that inefficient labour market sorting is happening
in Australia. Recent research by National Institute of Governance at Canberra
University, reported in The Gen Y Gender Wage Gap in Australia, shows,
for example, amongst the Gen Y generation the payoff to investing in education
and training is minimal (Cassells et al 2008). As with higher paid women, this
suggests that Gen Y members are increasingly engaged in jobs that require a
lower level of qualifications than has been acquired.

To return to the rhetorical question on the benefit of increased
women’s workforce participation, it is clear that the benefits go beyond
simple participation. Addressing the current inefficiencies requires policies
which address segregation (horizontal and vertical) as well as the
implementation of flexible working practices across all jobs. In the absence of
the desired flexibility in highly skilled jobs and jobs in non-traditional
sectors women will continue to sort into less demanding (and lower paying) jobs.
As a society we will continue to fail to maximise the benefits from our
investment in women.

4.2.2
Key References – Annotated

1. Austen,
S. 2005
. Education and aggregate participation rates: a dynamic
analysis
. Women’s Economic Policy Analysis Unit Discussion Paper No.
38. Available from: http://www.cbs.curtin.edu.au/index.cfm?objectid=313651F1-D668-E042-A40C3FE3665DEBF7

2. Miller, P. 2005. The role of gender among low-paid and high-paid
workers. Australian Economic Review 38(4): 405-17.

Miller uses data from the 2001 Australian Census of Population and Housing
Household to analyse the gender wage gap across the wage distribution. His
results show the wage gap is larger among high paid workers and more compressed
among low paid workers. He concludes that institutional factors, the work
environment and social norms are all areas that may require attention in order
to redress the undervaluation of women’s skills.

3. EOC. 2005. Britain’s hidden brain drain: the EOC’s
investigation into flexible and part-time working
. Executive Summary Report.
Equal Opportunity Commission. http://www.equalityhumanrights.com/Documents/EOC/PDF/Research/Britain's%20hidden%20brain%20drain%20%E2%80%93%20Executive%20summary%20of%20the%20final%20report.pdf

This report is best summarised in its own words:
“Britain’s
old-fashioned thinking about working is literally damaging its economy as well
as its welfare and health. Too many people are either over-worked, stressed or
under-utilised.

  • Shockingly, this investigation has uncovered a hidden ‘brain
    drain’ of 5.6 million part-timers who are working below their potential,
    one in five of the working population.
  • Some sectors and higher level jobs remain virtually ‘no
    go’ areas for part-timers, who are largely stuck in a ‘working-time
    ghetto’ as a result of old-fashioned management thinking about the
    expectations and limitations of part-time workers.
  • As the Chancellor of the Exchequer works toward the
    Government’s ambitious target of an 80% employment rate, which would
    require an additional 2.5 million people in employment (Moynagh and Worsley,
    2005), our investigation has also identified up to a ‘missing
    million’ older workers who say they would like to work, but many of whom
    would like to work part-time.
  • There is increasing work intensification and ever-longer hours,
    especially for full-timers. Britain runs the risk of ‘burn out’,
    with British employers witnessing an epidemic of work related stress – the
    talk of many boardrooms today. The DTI estimates that stress at work costs the
    UK £3.7 billion per year.
  • Families are losing out from the lack of flexibility. Women are now
    approaching half the workforce. Many fathers want to spend more time with their
    children and a growing number of us are becoming carers. Many people without
    family responsibilities are also seeking greater balance in their lives too, not
    least to contribute to the wider community.

So now is the time for fresh, flexible thinking about the nature of
work itself.” (EOC 2005, 4-5).

2. Cassells, R., Daly, A., McNamara J. and Keegan, M. 2008. The gender
wage gap for Generation Y in Australia. AMP.NATSEM and National Institute of
Governance. Canberra: University of Canberra.

This presentation focuses on recently released data which shows that Gen Y
women’s earnings are on par with their male peers. Whilst recognizing the
progress many women have made within the labour market the findings emphasise
the importance of understanding the context of this ‘equality’; Gen
Y women are typically at the start of their careers where pay levels are
relatively equal for women and men. Unfortunately the ‘equality’
diminishes as women age, with the greatest threat to equal pay occurring during
women’s child rearing years (25-44 years). Overall, women in Australia
continue to experience employment and pay inequality which significantly impacts
upon lifetime earnings and the accumulation of wealth and assets.

2. Minerals Council of Australia and Office for Women. 2007. Unearthing new resources: attracting and retaining women in the Australian
minerals industry
. Available from: http://www.csrm.uq.edu.au/docs/women-in-mining.pdf

This report was commissioned in order to examine issues relevant to the
attraction and retention of women in careers in the minerals industry. It
presents an extensive array of qualitative and quantitative data examining
career choice among young women and women’s experiences during employment
in the minerals industry. It is a significant example of employers’ need
to address organisational culture and practice to overcome potential skill
shortages.

3. Jefferson, T and Preston, A. 2005. Australia’s
‘other’ gender wage gap: baby boomers and compulsory superannuation
accounts’. Feminist Economics 11(2): 79-101.

(This reference was previously noted in section 2, above.) In 2005 Feminist
Economics produced a special issue on gender and ageing. This article was the
Australian contribution to the issue and provides gender estimates on the
retirement incomes of Australian men and women of the baby boomer generation. It
concludes a gender gap of at least 35% is likely among retiring baby
boomers.

4. Stiglitz, J. 2002. Employment, social justice and societal
well-being. International Labour Review, 141(1-2).

Joseph Stiglitz is a former chief economist of the World Bank and a leading
critic of the application of mainstream economic theory to labour markets. This
article is a succinct, easily read summary of the key reasons that deregulated
labour markets do not work well for many employees and have detrimental effects
on the national economy. He argues that deregulated labour markets lead to
market failure, weaker bargaining positions for workers and adverse welfare and
employment implications. He advocates policies that acknowledge that labour is
unlike other commodities; it needs to be motivated in order to be productive and
it is capable of transforming society. Such policies should be based on fair and
equitable employment standards.


5. The
Impact of Paid Parental Leave on Workforce Participation and National
Productivity

Despite the many social and economic gains women have achieved in the last
forty years, for many women in Australia the ability to effectively combine work
with family care-giving activities remains restricted to an either/or decision.
Without access to paid maternity / parental leave and family-friendly work
arrangements many women with children become the marginal income earner in a
“modified male breadwinner” household, with primary responsibility
for family-care roles (Hill 2007, 241). Whether in partnerships or not, as
secondary earners, women with children are over-represented in causal and
part-time jobs located in low paid sectors (retail, hospitality, health and
community services). These marginal positions have far-reaching implications for
women’s workforce participation patterns, their hours of work, earnings
and retirement incomes. Measures to alleviate these tensions, such as Family Tax
Benefits and the Baby Bonus have tended to be piecemeal and have been accused of
promoting a
‘Becker-esque’[4] 1950s
family agenda in which the ‘mother’ is removed from the labour
market indefinitely (Barns and Preston 2002).

Whilst WorkChoices and AWAs were heralded as the means through which women
could ‘negotiate’ access to paid maternity / parental leave and
flexible work arrangements, in reality this has not occurred (Jefferson and
Preston 2007). Opportunities for paid maternity leave are limited within the
Australian context. The vast majority of women in the labour market use a
combination of unpaid maternity leave, annual leave and other forms of leave
available to the individual woman (Whitehouse, Baird, Diamond and Hosking
2006)[5]. This ad hoc approach is
neither appropriate given the importance of childbearing and childcare for
social reproduction or economically sustainable, as the recent skills shortages
clearly demonstrate. The synonymy between childcare / household labour and
women’s work remains an area of gross inequity in the relationship between
women and men (Pocock and Hill 2007).

Within the global context, Australia lags behind in its responsibilities to
Australian women and their
families.[6] Paid parental leave has
been implemented in all but two countries in the OECD; Australia and the United
States[7]. The issues of childbearing
and child care and in particular, who and how it is provided, test
Australia’s foresight and responsiveness. Responsiveness to what Jensen
(2008, 3) describes as the “new social risks”; the collective and
wide-ranging risks (social and economic costs) associated with childbearing and
child care. Implementing a universally-accessible, government-funded scheme of
paid parental leave is one way of legitimately pooling the risks, sharing short
term costs and the longer term benefits (Jensen 2008).

The limited availability of paid maternity / parental leave has been the
subject of ongoing debate culminating in the Australian Productivity
Commission’s Inquiry into Paid Maternity, Paternity and Parental Leave. After considerable consultation the Commission has proposed a model in
keeping with the International Labour Organisation’s Maternity Leave
Convention 183
; an 18 week, government-funded scheme which is universally
available to all women who have participated in the labour market for at least
12 months.

Whilst calls for a national, government-funded paid maternity leave / paid
parental leave scheme may be labelled as exorbitant and unaffordable within the
current financial crisis, there is increasing global support for strategies
aimed at specifically supporting women’s engagement and participation in
the labour market and the economy. The disadvantage experienced by many women in
conjunction with the costs to business and losses to national productivity can
no longer be afforded. In their promotion of women in the economy, Ernst and
Young’s (2009, 1) ‘white paper’ Groundbreakers: Using the
Strength of Women to Rebuild the Economy,
clearly outlines an agenda for
change in which women’s potential is intertwined with “building more
inclusive societies and more diverse leadership ...meet[ing] the demands of a
new era”.

In Australia, our capacity to meet ‘the demands of a new era’ is
implicitly linked with the need to invest in the present and future workforce.
The provision of government-funded infrastructure, such as paid parental leave,
and the delivery of flexible working arrangements, is necessary to grow the
economy and return Australia to economic prosperity. Such provisions are also
necessary for Australia’s claims of equity and equality. In this context,
paid parental leave and flexible arrangements are a necessity and an
opportunity.

5.1. Paid parental leave and women’s workforce
participation

“At the moment, Australia has one of the lowest workforce
participation rates in the OECD for women aged 25 to 44” (Sharan Burrow,
ACTU, 08/04/08).

Central to the support of the proposed paid parental leave scheme is the
projected increase in women’s labour market participation. This projected
benefit is based upon evidence from countries in which a universal scheme of
paid maternity / parental leave is available and which highlight the
“significant effects of maternity leave on employment rates” (Austen
2008, 7; Abhayaratna and Lattimore 2006). As Australia’s population ages a
consequent slowing of the number of people who are working also occurs. The
recent skills shortages are indicative of the problems associated with
women’s low rates of participation in key areas of employment / industry
(Ernest and Young 2009; ABS 2007a). In the context of the global economy such
low participation, with its effects on productivity levels and economic growth,
is unacceptable. It is clear that the provision of some flexible workplace
arrangements such as maternity leave and part-time work over the last thirty
years have provided women with the means to return to the labour market after
childbirth. It is logical to conclude that further provisions which allow women
and men to balance family commitments with work will have a positive effect on
women’s participation (Access Economics 2006, i).

5.1.2
Recent data

Women’s participation in the Australian labour
market

As is depicted in Figure 3, the ‘M’ curve is a
distinctive feature of any graph representing women’s fragmented
relationship with paid work.[8] Within
the Australian context women’s and men’s participation rates are
parallel until age 24 years when a gradual but distinct divergence occurs.
Whilst women reach their highest participation in the 20-24 years age bracket,
for the remainder of the child-bearing years (25-35) women’s participation
rate decreases. At age 36 years the female rate again increases as women
re-enter the workforce, typically in part-time positions. Women’s rates
never reach those of their male counterparts or return to their pre-childbearing
rates. Women’s participation rates during the childbearing years are also
mediated by location and age of child. According to the ABS (2008) the
participation rate for women with children 0-5 years was 52%, for children 5-9
years it increased to 71% and for women with children 10-14 years, to 77 per
cent. In terms of location, women living in the major cities (73%) are less
likely to be involved in paid work than their female counterparts in inner
regional, outer regional or remote areas (76%) (ABS 2008). In the context of
these figures women’s participation dropped by 45 per cent between having
no children and having one child.

Figure 3: Workforce Participation Rates, Australia, 2006-07

Figure 3: Workforce Participation Rates, Australia, 2006-07

(Source: ABS 2008d).

As has been identified in earlier sections the participation rates for
Australian women aged 25-39 years is well below those of other OECD countries.
In 2006 Australia ranked 22nd among 30 OECD countries (Abhayaratna and Lattimore
2006), well behind participation rates higher in Canada, New Zealand, the US and
the UK (ABS 2007a; OECD 2006c). The low workforce participation rate of 72.9 per
cent for Australian women in the childbearing age group was the 8th lowest in
the OECD, lagging well behind Sweden (86.4 per cent), Portugal (84.8 per cent)
and Canada (81.8 per cent). Within the context of these figures, in order to
reach Canada’s position, Australia would need to increase its female
participation rate for those aged 25-44 years by 7.1 per cent, approximately
209,000 women (Abhayaratna and Lattimore 2006, 56). When part-time work is taken
into account the participation rates are lower; “effective labour supply
is even lower than these figures suggest since part-time work accounts for over
40 per cent of total female employment, which is one of the highest in the OECD
(OECD 2006a 134).

PML/PPL and Labour Market Attachment
International evidence
demonstrating the links between paid parental leave and women’s labour
market attachment is abundant. From a close analysis of OECD and other data it
is evident that countries which have paid parental leave programs, and other
forms of work-family support, have markedly smaller gaps between the number of
‘mothers’ in the labour market and the number of females within the
labour market. Ruhm’s (1998) study of nine European countries with
job-protected, government funded parental leave raised female labour market
participation by approximately 3 per cent. An early study conducted by
Rönson and Sundstrom (1996) found that women in Sweden who had access to
paid parental leave returned to work three times faster than women without
access to parental leave. In Norway women returned twice as fast (Rönson
and Sundstrom’s 1996). OECD (Family Database
2007
[9]) data for Sweden and
Iceland (also hosting a universal paid parental leave scheme) testifies to the
positive link between paid parental leave and labour market attachment. The data
shows that the rate of maternal employment (mothers with at least one child
under 16 years living at home) is higher than the participation rate of females
aged 25-44 years.

Eligibility and participation
In order to be eligible to receive
paid parental leave women need to have spent a particular period of time in the
paid workforce (the amount of time varies between countries however 12 months is
a typical figure). This acts as an incentive for women to engage in paid work
prior to pregnancy. If a woman resigns from the workforce prior to the appointed
time, for example four months, she forfeits access to paid maternity / parental
leave for the remaining 5 months. Resigning from paid work whilst on leave is
also problematic, as ongoing leave payments will be forfeited. These penalties
can be expensive with the costs a new child and reliance on either one-income or
a government-provided maternity benefit.

Return to work
With the provision of an appropriate period of leave
which is financially secure, women, and their partners, are able to provide
‘quality’ care for their child in the vital first months and years.
Whilst paid parental leave initially takes women out of the labour market for a
period of time the rate of return for this group of women is typically higher
than for women who have not had access to paid leave. The University of
Queensland’s extension of paid maternity leave to 26 weeks in 2005 has
been reported by the EOWA (2008, 9) as an example of this relationship. The
number of general staff who resigned while on leave decreased between 2005-06
and 2007 (EOWA 2008, 9).

Data from women with access to limited paid parental leave and/or unpaid
maternity leave provides a different return to work story. Whitehouse, Baird and
Diamond’s (2006) national study and the Productivity Commission’s Draft Report (2009, 5.22) record the stories of many women who returned
to work early. Both documents highlight the concerns which accompanied many
women’s return to work, with financial difficulties, resulting from either
unpaid or inadequately funded paid maternity leave, and lack of job security the
dominant features. In such instances the choice factor is ambiguous, with
motivation for returning to or finding new work premised on a necessity rather
than a desire. In organisational studies issues of motivation, mood and
emotionality have direct implications for job performance, job satisfaction and
productivity (Whitehouse, Baird and Diamond 2006).

5.1.3
Key References - Annotated

The literature relating to women’s
labour market participation and paid parental leave is varied in both its
approach and topic of discussion (see Table 11). Fertility rates have been an
issue of concern for some countries whilst for others, the research sought to
measure the impact of labour participation and women’s maternal decision
making, whilst others explored the provision of parental leave on men’s
engagements with active parenting. Within this broad array of topics a common
theme emerged; the positive relationship between paid parental leave and
women’s labour market participation. Within countries where universally
accessible family-friendly supports, such as paid parental leave, have been
instituted, the incompatibility between women’s paid employment and
childbearing has decreased (Bernhardt 1993).

Table 11: International research investigating the relationship between
women’s labour market participation and paid parental leave.
Country Authors / Researchers Key Points
Taiwan Zveglich, Rodgers and van der Meulen 2003
  • women’s working hours increased by 4.5%
  • employment rose by 2.5%
  • increase in total labour input was about 7%
Germany Merz 2004
  • increase in employment to population ratio
Japan
United Kingdom
United States
Waldfogel et al1998
  • Multi-country perspective
  • Maternity leave coverage increased the probability of women returning to
    same employer within 12 months of birth by

    • 76% in Japan
    • 23% in the U.S.
    • 16% in U.K.
Canada ten Cate 2003
Baker and Milligan 2008
  • Extended period of mandated job-protected leave led to 2.8-3.6% increase in
    the employment rate of women with children 0-2 years;
  • All leave entitlements increased job continuity with pre-birth
    employer

1. Jaumotte, F. 2003. Female labour force participation: past
trends and main determinants in OECD countries
. OECD Economics Department
Working Papers. 376.

Jaumotte’s (2003) study of women’s labour market participation in
17 OECD countries, including Australia, identified three key policy areas which
positively support women’s return to paid work. The areas included lower
taxes on second income earners, making part-time or full-time work financially
viable; paid maternity and parental leave to promote work-family reconciliation
and strengthen women’s labour market attachment; and childcare subsidies
for women in the labour market. Jaumotte’s (2003) research also found that
compared to other OECD countries, Australia’s public spending on formal
day care and pre-primary education alongside the limited scope of paid parental
leave, are well below the OECD average.

2. Duvander, A and Andersson, G. 2006. Gender equality and fertility
in Sweden: a study on the impact of the father’s uptake of parental leave
on continued childbearing. Marriage and Family Review 39(1/2):121-142.

The Swedish model of parental leave, introduced in 1974, is forthright in its
aim of supporting women’s return to the labour market. With a clear
emphasis on supporting women’s engagement with the labour market Duvander
and Andersson (2006, 122) highlight the paid work aspect of the model:

its income-replacement character provides incentives for them [women] to
become established in the labour market before considering childbearing. It also
allows women to keep a foothold in the labour market while taking care of
new-born children so that they can continue with labour market work after the
leave.

The generous provisions given to both parents also facilitates a more
equitable sharing of parental responsibilities and another mechanism through
which women are supported in their return to the workforce. Duvander and
Andersson’s (2006, 128) research, alongside a number of studies (including
Rønsen 2004) have identified a positive correlation between the
father’s up-take of parental leave and the mother’s return to the
labour market. The success of the model is evident in Sweden’s labour
market figures which show women’s participation in childbearing years as
nearly equal to that of men (Duvander and Andersson 2006, 125).

3. Austen, S. 2008. Submission to the Inquiry into pay equity and
associated issues related to increasing female participation in the
workforce
. House of Representatives Standing Committee on Employment and
Workplace Relations. Canberra. http://www.aph.gov.au/house/committee/ewr/payequity/subs/sub126.pdf

Canada provides another example of the effect of paid parental leave and
women’s labour force participation. Austen’s (2008) research into
the effects of child support policies on women’s engagements with paid
work focuses on the significant difference between Canadian and Australian rates
of women’s labour market participation in the childbearing years. In
Canada 80 per cent of women aged 24-40 years undertake paid work whilst in
Australia, 70 per cent of women in this same age bracket are engaged in paid
work (Austen 2008). Accounting for hours of work (part-time and full-time) the
difference between the two countries’ rates is accentuated; the part-time
participation rate for women aged 25-44 years in Australia is approximately
twice as large as that of Canada where 70 per cent of women aged 25-44 years
participate in part-time work (OECD, 2003).

4. Adsera, A. 2004a. Changing fertility rates in developed countries:
the impact of
labor market institutions. Journal of Population Economics 17. 17-43.

Adsera’s (2004a) analysis of the relationship between women’s
labour market participation and fertility rates over the past 35 years (in OECD
countries) shows that countries with labour-market institutions facilitating
women’s exit and entry in the labour market successfully combine high
fertility rates with high female labour supply (Adsera 2004a).

5. Whitehouse, G, Baird, M, Diamond, C and Hosking, A. 2006. The
Parental Leave in Australia Survey: November 2006 Report.
http:www.uq.edu.au/polsis/parental-leave/level1-report.pdf

In their national study of paid maternity leave, Whitehouse, Baird and
Diamond (2006) found that women had returned to work primarily because of
inadequate finances and a ‘fear’ that their job may not be held for
a longer period of time. According to Whitehouse at al (2006) 65 per cent of
women who returned to work within the first 15 months after the birth identified
concerns about money, their job and lack of access to further maternity leave as
key influences in their decision making (Whitehouse et al., 2006 p. 16). Within
this group 45 per cent identified that they couldn’t afford to not return
to work and 46 percent they would have taken more leave if they had been able to
access paid maternity leave. As research has shown, after such time
women’s return to work is premised on a desire to return to their job or
to finding work.

6. World Economic Forum. 2009. Global Gender Report, 2008.
Geneva: World Economic Forum.

Concerns about declines in fertility rates in context of high female labour
market participation also arise in discussions relating to the provision of a
universal scheme of paid maternity / parental leave. According to the World
Economic Forum’s Global Gender Report this concern is unfounded;
countries where it is relatively easy for women to work and to have children
experience higher female employment and female fertility (WEF 2008, 22).
Evidence from countries with a broad-based paid parental scheme, such as
Denmark, Norway and Sweden, confirms the ability to maintain high fertility
rates alongside very high female labour force participation (Rønsen
2004).

5.2
The impact of paid parental leave on the economy

5.2.1
Recent data

In highlighting the low participation rates for women
aged 25-44 years the issue of costs cannot be overlooked. Such losses are not
only experienced at the personal / intra-familial level in terms of real income
and opportunities but impact on the broader economy in terms of lost production
and consumption (Lattimore and Pobke 2008). On a local and individual level,
research consistently proves that women reinvest the majority (approximately 90
per cent) of their income in the household and the community. When this income
is suspended or terminated so are the contributions to the broader economy. In
crude terms, forgone earnings at the personal level carry through to the
national economy; less personal money means less consumption, less demand and
less supply. Such losses can be substantial. According to recent research by the
Productivity Commission (Lattimore and Pobke 2008) women forgo approximately 31
per cent of their potential income for a first child and a further 13 per cent
for a second child and a further 9 percent for a third child. Over the course of
a woman’s working life-time this amounts to earnings over $300,000 for a
single child.

At the national level the collective economic impact of women’s time
out of the labour market is also substantial. An Inter-American Development Bank
report stated that “without a doubt, women joining the workforce will
increase the economic overall efficiency of a country, whether developed or
developing”. Goldman and Sachs Global Economics Paper, Gender
Inequality: Growth and Global Ageing
(No. 154) (April 2007) clearly
identified the economic growth spurred by closing the gap between women’s
and men’s labour market participation. According to their reporting,
closing the gap would boost the U.S. GDP by 9 per cent, Eurozone by 13 per cent
and Japan’s GDP by 16 per cent (Goldman Sachs 2007, 6).

5.2.2
Key References - Annotated

1. Cassells, R. Miranti, R. Nepal, B
and Tanton, R. 2009
. She Works Hard for the Money. Income and Wealth
Report. Issue 22. April, 2009. AMP. NATSEM http://media.amp.com.au/phoenix.zhtml?c=219073&p=irol-irhome

Data from this NATSEM report states that women with children continue
to earn significantly less than both women without children and their male
counterparts. According to the Report a man with a Bachelor’s degree and
who has children can expect to earn around $3.3 million over the course of his
working life. A woman with the same qualification and with children will earn
only $1.8 million. This has particular implications for women’s the
accumulation of superannuation, promotional opportunities and earnings. Whilst
Baby Boomer men have around 1.7 times more disposable income than women of the
same age, there is also a gap developing within Gen Y males and females.
According to the Report, 18 per cent of Gen Y men have a super balance of
between $25,000 and $100,000 compared to 14 per cent of Gen Y women. This is at
a time when the wage gap between Gen Y women and men is at its lowest of 0.6 per
cent.

2. Whitehouse, G. Baird, M and Diamond, S. 2006.

In their comprehensive survey of parental leave in Australia, Whitehouse,
Baird and Diamond (2006) provide some alarming findings which further highlight
the economic and social disadvantages to women of having children. Of women who
were first-time mothers, 73 percent were employed in full-time positions, 76
percent had permanency and 31 percent were in the private sector. In the
corresponding figures for women who had other children; 28 percent were in
fulltime employment; 66 percent had permanency and 37 percent were less likely
to be in private sector jobs. The ‘mommy track’ identified within
the literature is clearly at play here.

3. Access Economics. 2006. Meeting Australia’s ageing
challenge: the importance of women’s participation
. Report for The
House of Representatives Standing Committee on Family and Human Services.

http://www.accesseconomics.com.au/publicationsreports/getreport.php?report=115&id=152

This reference has been annotated in Section 2.4.1 of this report.
Access Economics’ 2006 Report responds to issues raised in the 2002
federal government’s Intergenerational Report (IRG) which
highlighted concerns regarding the effects of an ageing working population on
future economic growth. Macroeconomic modeling was undertaken by Access
Economics (2006, 1) as a means of measuring “the impact of changes to
women’s workforce participation on projected economic growth in coming
decades”. Whilst closing the gender participation gap (between women and
men) contributes to economic growth, increasing women’s full-time
participation engenders a greater contribution to national income.

5.4 The
impact of paid parental leave on business

The benefits to business are multifaceted, encompassing financial and social
returns and higher levels of productivity. This section draws on national and
international research to provide an overview of the costs and benefits of paid
parental leave for business. Many women who resign from paid work in order to
have a child experience the costs of finding a new job and a new employer. The
benefits of the ‘right to return’ policy act as an incentive to
women to return to the same employer / organisation (job return guarantee)
whilst limiting the costs associated with continuity and familiarity with an
organisation / employer. This is of particular benefit to women who have worked
in organisations which reward employee commitment, offer job security and
quality and “the social links and wage gains from firm-specific human
capital” are also vital in women’s wages growth and promotional
opportunities (Productivity Commission 2009, 5.14-15). This has particular
implications for women in professional and managerial employment.

5.4.1
Recent data

The costs to business of women taking time out of the
labour market and often not returning to the same employer or the workforce have
short and long-term implications for the organisation’s sustainability. A
preliminary study undertaken by The MetLife Study project (1997) calculated the
financial impact of family care on business. The Study’s findings reported
that lost productivity due to family care costs U.S. businesses between $11
billion and $29 billion annually. This was alongside the lower morale among
employees and declining retention rates all of which result in higher turnover
costs and lower productivity (The MetLife Study 1997, 193).

The benefits of paid parental leave to the organisation are multiple,
encompassing both tangible and intangible, quantitative and qualitative.
Wisensale’s (2006, 193) review of California’s Paid Leave Law
identifies the following:

Employers also benefit from family leave through lower worker absenteeism,
reduced turnover rates, enhanced productivity, higher morale, and greater
company loyalty...

5.4.2
Key References – Annotated

1. Charlesworth, S. 2007. Paid maternity leave in ‘Best Practice’ organisations: introduction,
implementation and organisational context. Australian Bulletin of Labour 33(2): 158-179.

Within the research literature, paid parental leave is described as the
hallmark of a modern twenty-first century company (Charlesworth 2007, 169). In
her study of organisations adopting or extending provisions for paid parental
leave, Charlesworth (2007, 164) clearly identifies the small role played by
‘the business case’ in the motivations identified by managers and
human resource personnel. This is not to suggest that organisations are
disinterested in issues of productivity and financial sustainability rather,
these were considered “irrelevant in terms of the real, but unquantified,
value gained from ‘looking after employees’ (Charlesworth 2007,
165-166). Factors such as organisational cohesion, enhancing employee morale and
commitment, becoming an employer of choice, organisation’s reputation and
recruitment / retention factors rated higher (Charlesworth 2007, 164-167). There
was also an expressed concern to be seen as engaging with corporate social
responsibility and responding to community values (Charlesworth 2007, 166). As
Charlesworth (2007, 167) states paid parental leave helped “to position
the company and the management as both industry and community leaders and good
corporate citizens”.

2. Ruhm, C. 1997. The Family and Medical Leave Act. Journal
of Economic Perspectives
11(3): 175-186

Central to the promotion of paid maternity / parental leave is the issue of
women’s labour market attachment and more specifically women’s
employment behaviour. Given that paid maternity / parental leave can only be
accessed through the labour market (typically after a 12 month period of
involvement) the scheme can act as a critical tool for employers in the
recruitment and retention of female employees. Emphasising this human resource
potential Ruhm (1997) identified this form of leave as a valuable asset in both
recruiting and retaining female employees: women enter the labour force in order
to gain the “work history requirements needed to qualify for leave”
while job-protected leave can encourage a faster return to work for mothers
(Ruhm 1997, 305).

3. Institute for Women’s Policy Research. 2007. Maternity
leave in the United States
.
http://www.iwpr.org/pdf/parentalleaveA131.pdf

The United States is the other country which has no federal legislation
providing parents with paid leave. Within the private sector such provisions are
left to the discretion of employers. As with Australia, this results in an ad
hoc and inequitable approach to paid parental leave. Within the U.S. federal
government new-parents use a combination of unpaid vacation leave, sick days or
unpaid time off. Across the entire private sector of the U.S. only 8 per cent
of workers have access to paid parental leave. These employees have the
following characteristics:

Table 13: Typical characteristics of paid parental leave recipient in the
United States, 2007.

Sex Female
Hours Full-time
Position Management or Professional
Organisation type 100 or more workers
Earnings $15 or more per hour
Location Pacific, New England or Atlantic regions

(Source: Institute for Women’s Policy Research 2007).

The emphasis in studies of labour market participation and paid parental
leave tends to be on the period of time after the baby is born. However
workplace difficulties can and do occur for many women during pregnancy;
difficulties which impact on her continuing engagement with paid work. According
to NATSEM’s (2009) Report 22 per cent of pregnant women had experienced
difficulties within the workplace because of their pregnancy; difficulties such
as “receiving inappropriate and negative remarks” and “missing
out on training and development opportunities”. This later issue has
implications for ongoing career development and return-to-work motivation.

Even within the ‘100 Best’ organisations the provision of paid
parental leave is both scant and piecemeal: 24 per cent of employers provide
four weeks or less paid maternity leave, 52 per cent provide 6 weeks or less; 7
per cent of the highest-ranked companies offer no paid maternity leave and
another 7 percent provide one to two weeks. None of the ‘top’
companies provide more than six weeks of paid paternity leave and only 7 of
these 100 companies provide seven or more weeks of paid parental leave for
adoption.

4. Mahony. A. 2001. Paid maternity leave? Professional Update 11(2).
http://www.apesma.asn.au/women/articles/paid_maternity_leave_apr_01.asp

According to Mahony (2001) the benefits to business (and the national
economy) of providing paid parental leave are multiple, as numerous case studies
prove. One of the key benefits is in the reduction of staffing costs associated
with resignation. According to an EOWA report cited in this article, staff
turnover and replacement costs can consume 50 – 70 per cent of an
organisation’s business. Mahony (2001) reports that “studies have
shown the initial cost of introducing maternity leave is often recouped within
three years in lower turnover, fewer recruitment and training costs and other
related expenses as well as increased productivity and efficiency”.
Companies such as the Westpac Bank and AMP claim that the savings made in
retention outweigh the costs of paid parental leave. As an example AMP rates of
return has increased from 52 per cent in 1992 to 90 per cent in 1997. Return to
work is also facilitated through the provision of part-time work and options to
work from home. Westpac reported a similar increase in retention from 54
per cent in 1995 to 93 per cent in 2000. John Fairfax Publications has noted an
88 per cent return rate compared to 37 per cent in 1993. BT Australia provides
paid parental leave as both a social and economic reasons, identifying the paid
leave as a way of “mothers feeling valued and recognized”.
Interestingly this company reports a 100 per cent rate of return.

5.5 Impact
of paid parental leave on the individual

5.5.1
Recent data

Research over decades has consistently highlighted the
gap in earnings between women who have and don’t have children (Chapman et
al 2001; AIFS 2000; Breusch and Gray 2003). This has come to be referred to as
“’mothers’ forgone earnings’ or the ‘family
gap’” (Breusch and Gray 2004, 125). Time taken out of the labour
market comes with particular costs. For women without paid parental leave the
costs are two-fold; short-term costs associated with the temporary period out of
the labour market and longer term costs associated with reductions in human
capital, including skills, training and promotional opportunities. These costs
reduce women’s lifetime earnings. Women who undertake part-time or causal
work also forgo earnings due to lower pay rates and have limited access to
employment benefits and/or family-friendly arrangements (Jefferson and Preston
2007). The extent of this penalty can be life-long, as Breusch and Gray (2004,
127) state: “the impact of lower stock of human capital is to reduce the
wage rate and hence earnings, perhaps for the rest of the persons
[woman’s] working life”.

1. Breusch, T and Gray, E. 2004. New estimates of mothers’
forgone earnings using HILDA data. Australian Journal of Labour Economics. 7(2): 125-150.

Recent research by Breusch and Gray (2004) provides important insights into
women’s forgone earnings, using the Household, Income and Labour
Dynamics in Australia
(HILDA) 2001 data. A series of simulations are made in
relation to women’s lifetime earnings across a 37 year period from age 23
to 59 years. The earnings for women with middle level education and without
children provide the standard against which the costs of a first child (and any
subsequent children) are measured. Age at birth is assumed to be 25 years for
the first child, 28 years for the second and 31 years for the third child. This
research is the first in Australia to identify the effect of timing on forgone
earnings.

For women without children earnings are estimated as $788,000. With one child
earnings are reduced to $541,000 (a decrease of $247,000); with two children
they decreased by an additional $103,000 (to $438,000) and with a third child
the earnings decrease another $70,000 (to $368,000).

Table 14: Maintained earnings, by education level and number of
children
HILDA 2001 (% net)
Degree
1 child 72
2 children 62
3 children 55
Completed year 12
1 child 69
2 children 56
3 children 47
Incomplete high school
1 child 60
2 children 42
3 children 32

(Source: Breusch and Gray 2004, 140).

The findings (see Table 14) highlight the significant losses in earnings
(measured in proportional terms) experienced by women across education levels
and according to number of children. As is illustrated the highest losses in
earnings are experienced by women with the lowest levels of education;
conversely the higher a woman’s level of education the less she loses in
earnings. Number of children and the age of the child/ren are also important
factors. According to the data the greatest loss of earnings occurs in the
child’s first years when women typically spend more time in unpaid work.
The impact of this effect slowly reduces as the child grows older and women
begin to return to the labour market in part-time or casual jobs. Forgone
earnings also increase with the birth of every child (see Table 14).

A woman’s age (or timing) is also a mediating factor in forgone
earnings with arguments to support having children at both an early and later
age. Forgone earnings are lower for women who have a child in their early 20s,
increasing substantially as a woman ages. However, this can be counteracted by
the age/experience factor, whereby a woman who has a child later in her life is
a mother for less of her working life than if she gave birth when she was 23
years. This has been calculated as follows: A woman who gives birth at 25 years
maintains 69 per cent of her earnings; if she has her first child at 30 years
she maintains 72 per cent of her earnings while at age 35 years, she maintains
76 per cent of her earnings.


6. Flexible
work Arrangements

Paid parental leave is but one platform in a range of time-based policies
designed to support women, and men, in the care of their children and other
family members. Alongside of this is the need to develop a systematic and stable
means of funding child care which allows women and men to participate in the
labour market (Fagan and Walthery 2007, 3). Flexible work arrangements that
allow for either or both parents to provide childcare and engagement in
household work not only contribute to gender equality but positively impact on
national productivity levels. Countries such as Iceland and Sweden which have
extensive parental leave and child support schemes also record high
participation rates for women as mothers (Bovenberg 2007). Interestingly within
these two countries the percentage of mothers employed is slightly larger than
that of all women employed (OECD 2007). As the recent skills shortage in
Australia highlighted, women are an underutilised resource of labour. Without
workplace arrangements that allow for a full range of flexible practices for
both women and men, women will continue to be locked in part-time work. Such
developments need to be informed by an understanding of reconciling care and
work and that child care (and other forms) of care are part of working life.

Currently the Australian labour market offers limited opportunities for
flexible family arrangements despite the provision of such being identified as
the “most effective strategy for retaining staff”; more effective
than the offer of financial incentives (EOWA 2009, 10). Part-time work is the
predominant form of flexibility available and as the data clearly identifies,
this is an option taken up by many women with children. However, these positions
tend to be located in the low paid sectors of personal services, retail and
hospitality. Such jobs have no or limited access to leave entitlements and are
typically of low quality. According to many women who have returned to part-time
work after maternity leave, part-time work is a full-time load squeezed into a
reduced number of hours. In this scenario organisations “are simply
squeezing a full-time workload into part-time hours and [women are] getting paid
less as a result” (EOWA 2009, 32).

Corporate citizenship and social responsibility issues also enter the debate
on both paid parental leave and flexible workplace arrangements (Charlesworth,
2007; Mahony 2001). Increasing numbers of organisations, particularly larger
companies, are using family-friendly arrangements as a way of meeting
commitments to equal opportunity and work/life balance. The benefits are
multiple, encompassing employees who gain the benefit of the options, businesses
who retain staff and shareholders and customers who are increasingly more aware
of social and environmental issues in their decision making.

This section diverges from the previous discussions in format. As has been
highlighted in earlier discussions, women’s labour market participation
has implications for personal and familial income and consumption as well as an
effect on broader economic growth and national productivity. Research relating
to flexible workplace arrangements occupies an interesting space within the
literature. In relation to non-childcare issues the literature tends to focus on
the provision of unpaid or informal care and the cost to the individual carer
and their family, the workplace / business and ultimately the broader economy of
the limited options currently available. In recognition of these connections
the following discussion of Time use and Business and flexible
workplace options
responds to the following questions:

  • What evidence is there that flexible work arrangements have an impact on
    productivity?
  • What is the benefit to business (in dollars) of flexible work
    arrangements?
  • What is the impact of flexible work arrangements on workforce
    participation and national productivity?

6.1
Time use?

Time spent out of the labour market impacts not only on
economic growth but on national productivity. Hence, improving women’s
access to and participation within the workforce has implications for the
broader economy. In the last decade a number of key studies have highlighted the
interconnections between women’s marginalisation in the labour market,
primarily due to part-time work and the lack of flexible or family friendly
workplace arrangements. The lack of work/life balance is particularly evident in
recent data provided by the ABS (2009f) Time Use Survey and the NATSEM
(2009) Income and Wealth Report. The data clearly illustrates the
inequitable distribution of household and childcare activities between women and
men. This unequal distribution is not confined to those who work full-time but
is evident in the results of women and men who work part-time. It is clear that
change is required; however, how work and family balance and other care giving
activities are facilitated to a large extent depends upon individual
organisations re-thinking their workforce policies (Hudsons 2006; EOWA 2008).

6.1.1
Recent data

According to recent data from the ABS (2009f)
‘Trends in household work’ women still undertake more household work
than their male counterparts; this was particularly true for couples with
children. Whilst men have begun to assume a more active role in the care of
children women still spend more than two and a half times as long caring for
children. The types of activities undertaken within this childcare were also
gendered. Mothers spent more of their time on the psychical and psychological
care of the child (43%, compared with 27% for fathers) whilst fathers spent more
time on play activities (41% compared with 25% for mothers). Compared to their
female counterparts without children, mothers undertook 29 hours more household
work per week, with an extra seven hours per week on domestic activities. This
is accompanied by less sleep and had less time for recreation and leisure
activities than women without children. For fathers, the extra household work
came at the expense of sleep and recreation and leisure time, but not paid
work.

6.1.2
Key References - Annotated

1. AMP. NATSEM. 2009. She works
hard for the money: Australian women and the gender divide
. Income and
Wealth Report. Issue 22. April, 2009. http://media.amp.com.au/phoenix.zhtml?c=219073&p=irol-irhome
These
findings were supported by the NATSEM Report (2009). Whilst men’s
participation in domestic and childcare activities has increased over the
decades women continue to undertake more hours of housework than their male
partners. Table 15 depicts the work-life balance data gathered in NATSEM’s
recent report.

Table 15: Average hours per week spent on selected activities for
full-time workers with dependent children, by gender, 2006

Women Men
Paid employment 42 48
Outdoor tasks 3 5
Household errands 5 4
Looking after children 13 10
Housework 15 6
Volunteer / charity work 1 1

(Source: NATSEM calculations from Household, Income and Labour Dynamics in
Australia
(HILDA) Survey, Wave 6 unit record data).

The NATSEM report also highlights the number of women who take unpaid leave
in order to care for others. Unpaid leave is the second most frequent working
arrangement used to provide care to another person. According to the data, 21
per cent of employed women participate in this arrangement compared with 11 per
cent of men. This raises the issue of women’s forgone earnings which when
combined with the losses to earnings accumulated through childbearing mean women
make considerable financial and social sacrifices to meet their family’s
care needs.

6.2
Business and flexible workplace arrangements

6.2.1
Recent data

Alongside part-time work, flexible work options include a
range of supports and practices with the aim of supporting parents with children
and increasingly the support of older or unwell parents by their children.
According to the EOWA (2009) Report, over 90 per cent of organisations surveyed
provided their employees with access to family and carer’s
leave[10] (96.6 per cent) and
part-time work (95.1 per cent). A smaller number 87.6 per cent, provided
flexible hours. The option of working from home and job sharing was provided to
employees by 58.5 and 56.7 per cent of organisations respectively. Compressed
hours was only provided by 40 per cent of organisations. Childcare assistance
and services was the least provided flexible working option with only 11.8 per
cent of organisations offering this to staff.

6.2.2
Key References - Annotated

1. Equal Opportunity in the Workplace
Agency (EOWA). 2008.
Survey of Workplace Flexibility 2007. Sydney:
Equal Opportunity in the Workplace Agency.

The call for quality part-time jobs is not new. Whilst part-time work
constitutes approximately half of women’s labour market participation its
quality and remuneration are typically low. The lack of part-time work in
professional roles is typically limited to feminine-stereotyped occupations such
as nursing and other human service / caring professions. The EOWA’s Survey of Workplace Flexibility 2007 highlights the issue of part-time
work throughout their report, identifying a range of issues associated with its
provision. In addressing the lack of quality and professional part-time work the
EOWA report draws on the University of Queensland as an interesting case study.
The University’s paid parental leave program adopts a progressive strategy
in relation to part-time work. Rather than limited to low paid and low skilled
jobs, academic part-time work is available at the same classification level and
can entail the same work (albeit redesigned to part-time hours) as was held
prior to her taking leave. For women returning to academic work full-time, there
is a similar right to return to the same classification level. As a result of
this strategy the number of academic women resigning while on leave has reduced.
More women are taking up the academic part-time work, although the majority of
academic women who return, take up full-time work.

2. Hudson. 2006. The case for work/life balance: closing the gap
between policy and practice.
20:20 Series. http://au.hudson.com/documents/emp_au_Hudson_Work-Life_A4_Std.pdf

The Hudson 20:20 paper on work/life balance provides a brief but
useful overview of the policy and practice implications of flexible work
arrangements within the organisational context. Throughout the discussions the
Report draws on the ‘bottom-line’ argument to focus attention on the
costs to business of not providing appropriate strategies for workers to balance
their work, family and other caring commitments. These costs are identified as
embedded within the relationship between an employee’s motivation,
flexible work options and productivity (Hudsons 2006, 2);

And importantly, organisations not providing real opportunity for employee
work/life balance are opening themselves up to increasing numbers of
dissatisfied and unproductive employees and hence increased attrition rates.

In their list of recommendations attention is again drawn to the cost-saving
capacity of work/life policies and practices through the creation of a
‘contented’ workplace in which policies make ‘real’
differences to the personal-professional lives of employees (Hudsons 2006, 23).
The Report (Hudsons 2006, 23) refers to the ‘flow-on’ benefits of
employees with balanced lives: “improved organisational commitment;
reduced turnover and higher retention; reduced absenteeism; greater
productivity; and reduced work/life conflict”.

3. Senate Standing Committee on Legal and Constitutional Affairs.
2008
. Chapter 8 - impact on the economy. Effectiveness of the Sex
Discrimination Act 1984 in eliminating discrimination and promoting gender
equality
. Canberra: Commonwealth of Australia.
http://www.aph.gov.au/SEnate/committee/legcon_ctte/sex_discrim/report/c…

This chapter focuses on the costs of sex discrimination to organisations and
the broader Australian economy. Included in the discussions of sex
discrimination were women’s access to paid parental leave and flexible
workplace arrangements. A submission from the Australian Women Lawyers
association also identified the economic benefits of removing discrimination in
workplaces through the introduction of flexible work measures. These benefits
include “improved staff retention, increased productivity and reduced
absenteeism”. The Diversity Council of Australia’s submission was noted as
containing examples of companies who gained “significant commercial
benefits” through the provision of flexible working arrangements including
paid parental leave and work-based childcare. The economic benefits of providing
flexibility were echoed by the Association of Professional Engineers, Scientists
and Managers Australia. The Association’s submission described the
retention of skilled and experienced women in the technical professions as an
economic imperative.

4. Charlesworth, S and Whittenbury, K. 2007. Part-time and
part-committed? The challenges of working part-time in policing. Journal of
Industrial Relations
. 49(1): 31-47.

This article focuses on the demand for quality part-time jobs in professional
labour markets. Drawing on Colette Fagan’s work, the authors discuss the
marginalisation of part-time work within the Victorian Police Force, identifying
the need to “make part-time work an integrated rather than a marginalised
form of employment”. Currently part-time police work is locked within a
discourse of work in which commitment is measured according to hours worked
(time on the job) and face time. This cultural narrative is reinforced by
institutional barriers which shape the job content and schedule of work hours
for part-time work. The location of part-time work in administrative and
non-operational police work exemplifies its low status and positioning as
women’s work. It is no surprise then that part-time work workers in the
police constitute just 4 per cent of the workforce compared to the Australian
labour market where part-time workers constitute 29 per cent of all employees
(this is using ABS 2005 data). The authors claim that a re-education of
full-time officers is necessary as a means of changing the work narrative
alongside broader changes to the structure and positioning of part-time work.

6.4 Flexibility
and caring responsibilities over the lifecycle

6.4.1
Recent data

According to the ABS Disability, Ageing and Carers Survey 2003 data there were approximately 2.6 million people providing care to another
person due to disability or age. Of this figure, approximately 26 per cent of
carers provided care to their child/ren, 23 per cent provided to a parent, and 9
per cent to another person. Around 19 per cent of the overall group were primary
carers. Whilst women comprise 54 per cent of all carers, 71 per cent of primary
carers are women. As Australia’s population ages the need for informal
carers will also increase. Currently there are around 3.5 million Australians
aged 65 years and over. According to data projections, this figure is set to
double by 2051 with more than 7 million (26 per cent of the population) people
in this age group. The workforce implications of this population shift encompass
the potential for wide-ranging skill and labour shortages. Unless organisations
embrace more flexible working arrangements which allow both women and men to
participate in caring activities, these shortages will not be met.

6.4.2
Key References – Annotated

1. Australian Bureau of Statistics. 2003. Disability, Ageing and
Carers, Australia, 2003
. Catalogue No. 4430.0. Canberra: Australian Bureau
of Statistics;

AND

2. Office of Work and Family. 2008. Chapter 4: Australia’s
carers. Families in Australia 2008. Department of the Prime Minister and
Cabinet. Canberra: Australian Government.
Carers’ capacity to access
paid employment is often limited, due to the demands of care giving and the lack
of flexible working arrangements within Australian organisations. According to
ABS data only 53 per cent of carers are employed, with around 38 per cent of
primary carers (aged 15 and over) in some form of employment. Primary carers in
particular (71 per cent of whom are women) have limited labour force attachment
with over half (54 per cent) working part-time as a means of providing unpaid
care. According to Abhayaratna et al, (2008, 133) 23 per cent of primary carers
reduced their standard working hours and had time off from work on a more ad hoc
basis as a means of facilitating their care giving responsibilities (see Figure
4) (Office of Family 2008, 34). This experience is similar to that of women
with young children who return to part-time work because of childcare
activities. Under-utilisaiton is a common theme in the data. Of primary care
givers not in the labour force 36 per cent reported that they would like paid
work while continuing in their caring role, with 80 per cent identifying
part-time work as the most suitable. The problems associated with part-time work
are noted throughout this report; weak attachment translates into lower incomes,
minimal access to employment entitlements and lower standards of living than
non-carers, despite the high expenses incurred through the caring role (Office
of Work and Family 2008, 34).

Figure 4: Labour force status of carers (a) 2003

Figure 4: Labour force status of carers (a) 2003

(a) Aged 15 and over

(Source: ABS 2003, 4430.0).

Age also interacts with labour market attachment. As is shown in Figure 5,
(Office of Family 2008, 30) people aged 35 – 64 years have the highest
rates of informal care giving (Office of Family 2008, 34). Alongside the age
factor, care giving is also gendered with more women than men providing informal
care between the ages of 18 and 74 years. As is identified in the Families in
Australia Report
(2008, 27) “people aged 35-39 years experience some
of the most intense caring responsibilities as they care for children as well as
for other people who are frail aged or are living with disability”. Again
this practice is gendered with more women than men undertaking this unpaid work
during this age bracket.

Figure 5: Age profile of primary carers (a) 2003

Figure 5: Age profile of primary carers (a) 2003

(a) Living in households.(Source: ABS 2003, 4203.0).

3. MetLife Mature
Market Institute. 1999
. The MetLife Juggling Act Study. National
Alliance for Caring / National Center on Women and Aging. Waltham, MA: Brandeis
University.

Undertaken by a cooperative team of researchers across the private and public
sectors in the United States, the MetLife Juggling Act Study (1999)
calculates the costs of care, which encompasses child care and other caring
responsibilities, in terms of lost wages and associated benefits gained through
contributions to various health and social schemes:

family care costs individuals as much as $659,000 over their lifetimes in
lost wages, lost Social Security benefits, and pension contributions because
they take leave, quit their jobs entirely, or pass up opportunities for
training, promotions, and choice assignments.

While Australia does not have a social security scheme per se, the employer
and personal contributions to superannuation which are vital to achieving some
form of security in retirement are relinquished when women take time out of the
labour market without paid benefits. Exploring these costs further, the MetLife
Study surveyed participants about the implications of unpaid care work. As the
findings report 29 per cent of participants indicated that they had declined
promotions, 29 per cent had turned down transfer or relocation opportunities,
and 22 per cent claimed that they missed out on opportunities to develop new job
skills (MetLife 1999, 193). In terms of cost to business the MetLife study
reported that lost productivity due to caregiving cost U.S. businesses $11-29
billion annually (MetLife Mature Market Institute, 1999). 

4. MetLife Mature Market Institute and National Alliance for Caregiving.
2006.
The MetLife caregiving cost study: productivity losses to U.S.
business
. Connecticut: MetLife Mature Market Institute.

This Report provides the combined results of the 2004 Caregiving in the
U.S
. survey and the updated 1997 MetLife Study of Employer Costs for
Working Caregivers
survey and report. The findings provide detailed
information on the total costs to employees and employers of “replacing
employees, absenteeism, crisis in care, workday interruptions, supervisory time,
unpaid leave and reducing hours from full-time to part-time” (MetLife
2006, 4). The difficulties of providing any level of care and working full-time
are pronounced with 6 out of 10 employees identifying that they had made some
work-related adjustments in order to provide the care. These adjustments
included reducing the number of hours spent in paid work, early retirement,
leaving the workplace (finding alternate work) and leaving the labour market
entirely. The costs to the individual and business are not insubstantial, with
amounts varying according to factors such as the level of care provided, hours
of paid work undertaken and position in the organisation. For example, the total
estimated cost to employers (based on lost productivity) for full-time employees
with intense care giving responsibilities is $17.1 billion per annum and 33.6
billion per annum for all other employees providing care. The average cost per
employee with intense care giving responsibilities is $2, 4441 and $2,110 per
annum for all other full-time employed care givers.


Conclusion

Women
have come a long way, but there is still a considerable way to go. In the
current economic environment, there is a danger that investment in gender
equality, may be ignored (WEF 2008 Global Gender Gap Report, 22). The
introduction of paid parental leave and flexible work arrangements provide an
integrated and systematic approach to supporting women’s labour market
participation, men’s participation in care giving and the longer term care
needs of our communities. Paid maternity leave has the potential to maintain
women’s attachment to the labour market and an employer whilst
acknowledging the significance of pregnancy and childbirth, allowing time for
bonding and attachment, recover from the birth, and establish bonding and
breastfeeding. When combined with the provision of flexible workplace
arrangements both parents have the opportunity to be active participants in work
and home life, creating more equitable relationships of care. Given that
“women account for half of the world’s population and half of its
talent. The costs of not developing and using this talent are huge” (WEF
2008, 22). As such, we would do well to consider what Charlesworth (2007, 166)
describes as “the costs of not taking action”.


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[1] The ARR is a measure of the
approximate number of full-time students in Year 12 as a percentage of their
respective cohort.
[2] These data
are sourced from ABS (2003a - Catalogue Number 4230.0, Education and Training
Indicators, Australia, 2002. Data Cubes; Topic 23. Higher Education Students.

[3] More recent estimates are
not available.
[4] This refers to
the New Household Economics model developed by Gary Becker in the late 1950s and
early 1960s. Within this model the incompatibility between childbearing and
labour market participation were resolved by calculating the direct and
opportunity costs of childbearing on the woman and her (male) partner. Given
women’s position in the labour market any ‘costs’ of time out
of the labour market were considered insignificant compared with that of the
male. Hence the gendered division of labour was economically appropriate and
rational.
[5] Until recently
Australian data on the use of maternity and parental leave was vague and ad hoc
leading to a statistical gap (Whitehouse, Baird, Diamond and Hosking 2006). The Parental Leave in Australia Survey distributed in May 2005 (Whitehouse,
Baird and Diamond 2005) is the most comprehensive statistical picture of
parental leave usage to date.
[6] It should be noted that the Australian Government announced the introduction of
a national Paid Parental Leave scheme in May 2009. The scheme is due to commence
in January 2011.
[7] It must be
noted that California and New York (state) both have paid parental leave
schemes.
[8] In commonly available
statistics the extent of this M shape is distorted somewhat by the use of age
brackets which aggregate statistics for 10 year age spans (See for example,
Bittman (1995)).

[9] At present there is no
comprehensive collection of national data on maternal (or parental) employment
across OECD countries. Data is sourced from a range of national resources and
the European Labour Force Survey. Unfortunately the does not distinguish
between part-time and full-time work which leads to an overestimation of
women’s presence in the workforce (OECD 2007, Family Database,
LMF2
, 3).

[10] It must be noted that access
to family / carer’s leave is currently provided for in the Australian
Fair Pay and Conditions Standard
which stipulates that an employer must
provide a minimum of 10 days paid personal/carer’s leave each year. This
Standard has been enshrined within the National Employment Standards due
to be introduced on January 1 2010.