Wider Economic Context of Family Policy Daniel Münich

Presentation - Brief Overview Economic and other context Specific situation in the Czech Republic in data Long-term economic context … and government declaration

Economic Context Employment rate and economic activity Income and productivity Aggregate productivity, GDP, tax, pension

Social and Psychological Context Frequent relation to economic context Changing situation:  Small families (rather 1 than two children)  Concentration in cities  Isolation in home environment   declining intensity and diversity of social interactions  BUT growing importance of social relationships in the society  The first child comes later - often in the middle of one's career  Higher level of education by women and a decreasing proportion of physically demanding professions

Employment Rate Relatively high in general  high in the middle age  low by young people (learning)  low by old people (retirement depends on the number of children)

Economic Activity Rate Declining in the past 10 years by women aged with children Own calculations, a selective survey of workforce

Employment Rate Declining in past 10 years by women aged with children Own calculations, a workforce selective survey

Employment Rate 2 Relatively low by women with secondary and tertiary education

Employment Rate 3 Extreme slump of employment rate by mothers (aged 20-49) with children under 6

Share of Children in Care Outside the Family Low

Share of Children in Care Outside the Family Low

Share of Children Cared Only by Parent Relatively high

Pay Gap Additional consequence of the parenthood period Rising with age - limited professional career options Lower investment in human capital of women (ex-ante, LLL) Difference between men's and women's average gross hourly earnings as a percentage of men's average gross hourly earnings (for paid employees). Note: Structure of Earnings Survey, Eurostat

Long-Term Impacts Birth rate (1 st & 2 nd child)  demography, pension Employment rate  pension (Figure) Educational and social disposition of children (Figure)  quality matters (Heckman‘s survey etc.)  in particular by children with lower social and economic background  economic impacts (GDP, pension), but not only.

Long-Term Impacts Intelligent family favouring policy can pay off: increased participation of women aged by 10 p.b. instantly lowers the PAYG deficits by more than CZK 10 mld/year (model by Bezděkova Committee II and NERV II).

Long-Term Impacts Cognitivne and non-cognitive abilities develop in pre-school age and are of crucial importance for the future development of a human being (great importance of financial affordability).

Policy Statement Overview Care for the children of parents who want to combine parenthood with their professional career Promotion of (i) company nurseries, (ii) alternative forms of care including neighbourly assistance. Even the availability of standard nurseries should be supported No attention to demographic prospects and mobility. Failure of local establishers (priorities and funds).

Policy Statement Overview Company nurseries do not promote mobility but dependence on the employer preferred only in large companies and bigger cities for children with better social and economic background Alternative forms Quality guarantee is not always sufficient – not childminding (quality matters)

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