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

Abstract

We empirically study the role of different family policies in determining women’s labor market behavior in the countries of the European Union between 1997 and 2008. Women tend to assume more family duties than men and, consequently, often participate less in the labor market. At the same time, family policies are to provide support to families while also helping women to reconcile family duties with labor market participation. Their impact, however, is not clear, especially when it comes to different forms of labor market activity. We use a static and dynamic panel econometric framework examining the link between four types of family policies and labor force participation and (part-time and full-time) employment. The results suggest no stable significant impact of any on overall labor force, but higher spending on family allowance, cash benefits daycare benefits appears to promote part-time employment, whereas only spending on parental leave schemes is a significant determinant of women's full-time employment.

Keywords: labor force participation, part-time employment, full-time employment, family policies, European Union

JEL Classification: H53, I38, J13, J21