Business Week, April 30, 2007, Monday
Business Week
April 30, 2007
SECTION: Up Front: Fiscal Fitness; Pg. 16 Vol. 4032
HEADLINE: How Working Moms Chip In Twice
BYLINE: By Peter Coy Edited by Deborah Stead
BODY:
Are working mothers a secret economic weapon? A research report from Goldman Sachs argues that countries where women both work and raise children are best prepared to cope with the looming global pension crisis.
According to the Apr. 3 paper, when women have careers and children, they are doubly contributing to their nation's pension system--fattening today's retirement coffers with tax payments and bearing the next generation of workers, who'll carry tomorrow's pensioners.
The report, by London-based Goldman economist Kevin Daly, concludes that developed countries don't have to choose between babies and women in the workforce. In fact, in countries where women have the most babies, they also come closest to men in their rate of employment. Daly attributes this to cultural norms and government policies that make it possible for women to have both families and careers. Among the developed countries in the study, Scandinavia ranked highest in working motherhood, while Europe's Mediterranean countries came in last.
American women resemble their Scandinavian sisters, although they work a bit less and procreate more. Women in the U.S. have the highest fertility rate of any major developed country, with 2.05 children each. They trail U.S. men by about 12 percentage points in employment rates. (Swedish women, by comparison, have just a five-percentage-point gender gap with men.)
Women in Japan, a nation with one of the least favorable pension outlooks, work less and have fewer children. Japan's fertility rate is 1.27, according to U.N. estimates. The country also has a male-female employment gap of roughly 23 percentage points.
Although it's not as bad, the job gap in the U.S. could be narrowed, Daly says, by ending tax discrimination against second earners and by subsidizing child care. Daly says Goldman Sachs isn't taking sides over whether women should work or raise families. "We simply argue that couples should have the freedom to choose [what] suits them. And surveys [in developed countries] suggest more couples want both partners to be in paid employment than is the case currently."
Cornell University labor economist Francine Blau says the Goldman Sachs paper adds a fresh argument to the case for policies that support working mothers. "I'm surprised that more attention has not focused on these types of issues in considering the future of Social Security," she says.
GRAPHIC: illustration, Illustration: Chart: The Baby Crop CHART BY RAY VELLA/BW
photograph, Photograph: I GOT YOU,BABE: One fix for pension troubles? PHOTOGRAPH BY PENNY GENTIEU/BABYSTOCK
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