Professional Documents
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In
By
Senior
Economist
Signe
Hansen
Employment
is
still
not
picking
up
The
demographic
changes
in
the
EU
in
the
years
to
come
mean
that
fewer
children
are
being
born
and
more
people
are
retiring,
all
resulting
in
less
people
in
the
labour
force.
In
that
light,
it
is
necessary
to
bring
more
people
into
work,
in
order
for
Europe
to
maintain
its
growth
potential
in
the
long
run
and
regain
momentum
in
growth.
One
way
to
both
increase
the
employment
rate
and
to
promote
gender
equality
is
to
enhance
the
public
childcare
system.
On
top
of
the
demographical
challenges
that
Europe
face
in
the
future,
Europe
is
still
struggling
to
get
out
of
the
crisis.
Today
it
is
more
than
5
years
since
the
outbreak
of
the
worst
economic
crises
since
world
war
two,
but
the
EU
employment
is
still
not
back
on
its
pre-crisis
level
(cf.
figure
1.).
The
gap
between
female
and
male
employment
is
also
seen
from
the
figure.
Source: Eurostat.
Large
austerity
measures
are
still
being
undertaken
around
Europe,
there
are
thus
strong
underlying
forces
at
play
pulling
employment
down
the
coming
years.
If
nothing
is
done
politically
it
will
take
many
years
before
the
growth
rates
in
Europe
are
high
enough
to
generate
jobs.
In
this
paper
we
will
present
an
alternative.
An
alternative
that
will
not
only
show
an
alternative
to
austerity
but
also
an
alternative
that
takes
the
future
demographical
challenges
into
account.
A
gendered
investment
plan
resulting
in
a
recovery
based
on
investing
in
childcare
as
well
as
in
creation
growth
in
Europe
in
a
way
that
focuses
on
female
jobs
Female
activity
on
the
labour
marked
The
activity
rates
in
Europe
vary
a
lot,
and
the
share
of
women
who
are
active
in
the
labour
market
is
very
different
between
countries.
Figure
2
shows
the
gender
gap
between
male
and
female
activity
2
rates.
In
all
Member
States,
the
activity
rate
of
men
exceeds
that
of
women.
The
gender
gap
between
male
and
female
activity
rates
indicates
the
employment
potential
related
with
increasing
the
female
activity
rate.
In
general
the
gender
gaps
in
activity
rates
are
smallest
in
the
Nordic
countries
and
larger
in
the
some
southern
European
countries
and
some
Central-
and
Eastern
European
countries.
Source: Eurostat.
There
are
many
reasons
for
the
difference
between
male
and
female
activity
rate,
but
for
the
younger
generations
of
women
the
responsibilities
for
children
is
a
mayor
explanation.
Figure
3
shows
how
activity
rates
and
full-time/part-time
rates
vary
with
the
number
of
children.
The
more
children
and
the
younger
they
are
the
lower
is
the
activity
rate
for
women
in
the
EU.
Only
24
pct.
of
the
women
with
3
children
(where
at
least
one
of
them
is
less
than
6
years
old)
work
full-time.
In
general
1/3
of
the
women
that
are
working,
only
work
part-time.
There
is
therefore
a
huge
potential
both
when
I
comes
to
getting
more
women
in
to
the
labour
marked,
as
well
as
increasing
the
hours
worked
by
the
women
that
are
already
active
on
the
labour
marked.
Source: Eurostat.
Figure
4
shows
the
female
activity
rate
decomposed
into
full-time
and
part-time
employment.
As
seen
from
the
figure
there
is
a
tendency
that
the
countries
with
high
activity
rates
also
have
a
large
group
of
part-time
workers,
especially
for
European
countries
like
Netherlands,
Austria,
Germany
and
Belgium.
Source: Eurostat.
The
need
for
childcare
Figure
5
show
the
enrolment
rate
of
children
under
3
years
decomposed
on
how
many
hours
per
week
the
children
are
spending
in
childcare.
There
are
huge
differences
between
countries.
Denmark
shows
out
by
having
the
far
largest
enrolment
rate,
combined
with
the
fact
that
the
majority
exceeds
30
hours
per
week.
Source: Eurostat.
Public
subsidized
childcare
increases
the
labour
supply
of
women
(mothers)
significantly,
because
when
parents
can
send
their
children
in
childcare
they
can
both
be
active
in
the
labour
market.
Of
course
increased
childcare
implies
that
more
kindergarten
teachers
and
other
childcare
personnel
must
be
hired,
but
if
a
kindergarten
teacher
can
take
care
of
children
from
four
parents,
then
hiring
one
kindergarten
teacher
will
free
four
people
for
employment.
The
parents
who
work
instead
of
taking
care
of
their
children,
can
make
use
of
their
education
and
will
thereby
be
more
productive,
which
will
benefit
society.
Public
subsidized
childcare
will
not
only
increase
activity
rate
but
also
cause
greater
specialization
and
in
this
way
productivity
gains.
And
there
do
seem
to
be
a
correlation
between
the
enrolment
rate
in
childcare
and
female
activity
rate
for
women
that
we
presume
could
have
small
children.
Figure
6
compares
the
female
activity
rate
with
the
proportion
of
children
in
childcare
in
a
number
of
European
countries.
The
overall
picture
is
that
there
seem
to
be
a
strong
correlation
between
the
share
of
children
in
childcare
and
the
female
activity
rate.
There
is
also
a
tendency
that
the
Nordic
countries
have
both
high
enrolment
rates
and
high
activity
rates,
while
especially
the
Central-
and
Eastern
European
countries
have
both
low
enrolment
rates
and
low
activity
rates.
5
Source: Eurostat
The
effect
on
labour
supply
given
increased
public
spending
on
childcare
depends
on
a
number
of
things.
As
an
example
the
calculation
is
made
for
Danish
numbers
in
table
1.
Source: Updated version of table 2.3.2, Bureau 2000 Brn i kroner og rer.
The
first
row
(a)
shows
the
number
of
fulltime
employed
per
100
children
in
different
day
care
offers.
This
number
will
vary
according
to
the
standard
and
type
of
day
care
offer.
The
second
row
(b)
shows
the
estimated
resources
used
for
building
institutions
(which
are
zero
in
the
case
of
family
day
care)
and
for
educating
and
training
staff.
These
two
(c)
add
up
to
the
total
resources
used
for
supplying
additional
day
care.
6
As
some
mothers
have
more
than
one
child
the
number
of
mothers
released
will
be
smaller
than
100
(d).
As
the
fertility
rate
in
Denmark
is
among
the
largest
in
Europe
most
countries
will
have
an
effect
of
numbers
of
mothers
that
is
larger
than
Denmark.
Not
all
mothers
having
their
children
in
day
care
will
be
active
on
the
labour
market.
The
(e)
row
indicates
the
participation
rate
of
women
aged
25
to
54
(84
percent)
times
the
number
of
mothers.
Some
countries
(e.g.
Sweden)
in
principle
only
offer
day
care
to
mothers
who
are
active
on
the
labour
market.
In
that
case
the
participation
effect
will
be
near
100
percent.
The
last
row
shows
the
net
gain
on
women
participation
rates
by
offering
an
additional
100
day
care
vacancies.
The
number
varies
according
to
the
kind
of
offer
given
but
is
in
all
circumstances
positive
and
significant.
The
calculation
illustrates
that
there
are
significant
effects
of
public
spending
on
childcare.
A
gendered
investment
plan
In
the
following
we
will
look
at
the
effects
from
a
gendered
investment
plan.
One
way
to
make
it
more
likely
for
women
to
participate
in
the
labour
force
is
to
develop
and
expand
the
public
childcare
system.
In
the
scenario
we
are
investing
in
the
childcare
system,
both
improving
the
existing
as
well
at
developing
and
extending
the
system.
On
top
of
that
we
stimulate
the
European
economy
with
government
investments
financed
by
taxes.
Box
1
explains
the
assumptions
behind
the
calculation
in
detail.
The
gendered
alternative
scenario
is
calculated
on
the
international
macroeconomic
model
HEIMDAL,
for
more
information
about
the
HEIMDAL
model
see
HEIMDAL
Model
description
and
properties
by
Hansen
and
Bjrsted
2012.
7
The
gendered
scenario
is
based
on
two
pillars,
firstly
investments
in
childcare
in
order
to
increase
womens
labour
supply,
secondly
a
more
traditional
investment
plan
with
a
special
focus
on
female
employment,
in
order
to
increase
the
demand
for
female
labour.
The
countries
participating
in
the
strategy
are
the
Southern
Eurozone
countries,
the
western
Eurozone
countries
and
the
UK.
In
the
model
calculations
it
is
assumed
that
the
framework
conditions
for
women
to
participate
in
the
labor
market
is
improved.
That
means
investing
heavily
in
expanding
and
improving
childcare
facilities
in
Europe,
with
a
special
focus
on
southern
European
countries
as
the
potential
for
increasing
the
female
participation
rate
is
largest
here.
It
is
assumed
that
the
improvement
in
child-
care
will
increase
public
employment
by
0,5
percent
gradually
towards
2018
(0,75
for
the
southern
Eurozone
countries),
and
the
improved
framework
will
gradually
increase
the
labour
force
during
the
next
5
years,
resulting
in
a
1
percent
increase
in
2018.
At
the
same
time
the
countries
are
increasing
government
investments,
starting
with
1
pct./GDP
in
2014
gradually
increasing
to
1,5
percent
in
2018.
Southern
Eurozone
countries
are
investing
1.5
pct./GDP
in
2014
gradually
increasing
to
2.5
pct./GDP
in
2018.
Taxes
are
being
increased
in
a
balanced
way
so
that
the
total
effect
on
the
public
budget
equals
zero.
Whereas
the
investments
are
spread
so
that
the
investment
level
is
increased
more
in
the
south
Eurozone
than
in
the
rest
of
the
countries
that
are
part
of
the
plan,
the
increase
in
taxes
is
spread
evenly
among
the
countries
that
are
part
of
the
plan.
The
split
between
female
and
male
employment
is
in
line
with
the
split
found
in
the
CAM
(Cambridge-Alphametrics
Model)1.
The
figures
below
illustrate
the
effects
on
the
European
economy
from
a
gendered
investment
plan,
resulting
in
a
recovery
based
on
investing
in
childcare
as
well
as
in
creation
growth
in
Europe
in
a
way
that
focuses
on
female
jobs.
Figure
7A
and
7B
shows
the
effect
on
EU-27
and
the
Eurozone
GDP.
When
improving
childcare
and
increasing
investments,
GDP
will
gradually
increase
and
in
2018
the
GDP
level
in
EU-27
will
2.4
percentage
higher
than
without
the
investment
plan.
The
GDP
in
the
Eurozone
will
increase
even
more
and
will
be
elevated
by
2.6
percent
in
2018,
the
larger
effect
on
the
Eurozone
is
due
to
the
fact
that
it
is
mainly
Eurozone
countries
that
participate
in
the
gendered
investment
plan.
1
For
more
information
see
Bargawi
and
Cozzi
(2014),
FEPS-SOAS
Policy
Brief
No.1
2014.
Source:
ECLM
based
on
calculations
on
HEIMDAL.
Figure
8.A
and
8.B
shows
the
effect
on
the
European
employment.
The
massive
investment
in
childcare
as
well
as
other
investment
will
boost
employment
in
Europe.
The
first
year,
the
gendered
investment
plan
will
created
close
to
1.4
million
new
jobs
in
Europe,
of
which
there
is
an
increase
in
female
employment
of
725.000
jobs
and
an
increase
in
male
employment
of
645.000
jobs,
meaning
that
the
increase
in
female
employment
is
12
percent
larger
than
the
increase
in
male
employment
the
first
year.
As
the
childcare
system
is
improved
and
expanded
all
over
Europe,
more
females
will
supply
their
labour
and
more
female
jobs
will
be
created
and
the
rate
between
new
female
jobs
and
new
male
jobs
will
increase.
In
2018
the
gendered
investment
plan
will
create
4.8
million
jobs
in
EU-
27,
of
which
more
than
2.7
million
jobs
will
be
female
jobs
and
2.1
million
jobs
will
be
occupied
by
males.
In
2018
the
gendered
investment
plan
will
have
created
30
pct.
more
female
jobs
than
male
jobs,
showing
how
targeting
investments
at
childcare
have
added
a
significantly
larger
share
of
female
jobs
compared
to
an
investment
plan
without
a
gendered
approach.
From
figure
8.A
it
is
seen
how
the
gap
between
the
two
pillars
are
widening
over
time.
In
figure
9.A-9.D
the
employment
effect
is
seen
in
a
number
of
regions
and
in
the
UK.
Also
in
these
figures
it
is
seen
how
the
spread
between
male
and
female
job
creation
is
widening
over
time.
In
the
Eurozone
the
gendered
investment
plan
will
have
created
3.5
million
jobs
in
2018,
where
the
majority
of
the
jobs
(in
absolute
numbers)
will
be
located
in
the
west
Eurozone,
in
relative
term
the
job
creation
in
the
west
Eurozone
and
in
the
south
Eurozone
is
about
the
same.
In
the
scenario
we
have
intensified
the
investments
in
the
south
Eurozone.
The
reason
why
the
job
creation
anyhow
(in
relative
terms)
is
the
same
in
the
west
Eurozone
and
in
the
south
Eurozone
is
due
to
the
underlying
multipliers
and
the
openness
in
the
economies.
The
total
employment
effect
is
the
sum
of
the
domestic
employment
effect
(from
the
investments
within
the
country)
as
well
as
the
spill-over
effect
(the
effect
from
an
increase
in
demand
from
other
European
countries).
Because
of
the
larger
spill-over
effects
in
the
west
Eurozone
compared
to
the
south
Eurozone,
they
experience
the
same
relative
increase
in
employment
even
though
the
investment
level
is
increased
more
in
the
south
Eurozone.
9
Table
2
shows
the
effect
on
GDP
and
employment
in
a
number
of
countries
and
regions.
In
the
period
from
2014
and
2018
GDP
in
EU-27
will
grow
by
2.4
percent
more
than
in
the
scenario
where
nothing
is
done.
In
employment
terms
the
total
effect
on
EU-27
will
be
more
than
4.8
million
extra
employed
in
2014
than
would
have
been
otherwise.
It
is
also
seen
how
the
GDP
multiplier
varies
between
countries
depending
on
their
openness
and
spill-over
between
countries.
In
the
German
export
oriented
economy
GDP
will
increase
by
3
pct.
over
the
5
year
period.
10
The
gendered
investment
plan
will
draw
Europe
in
the
right
direction,
create
jobs,
increase
the
female
participation
rate
and
promote
gender
equality,
ensure
that
Europe
will
have
a
quicker
return
to
its
historical
growth
pad
as
well
as
dealing
with
the
demographic
changes
in
the
EU.
As
explained
earlier
some
of
the
positive
effects
in
this
scenario
are
due
to
the
fact
that
some
of
the
European
countries
make
a
simultaneously
effort.
This
means
that
there
are
positive
spill
over
effects
on
the
individual
country
which
enlarge
the
effects
on
employment
and
wealth.
Table
3
gives
examples
of
spill-over
effects
on
countries
that
are
not
part
of
the
gendered
investment
plan.
Sweden
for
example
will
experience
a
GDP
increase
of
1.8
percent,
and
60.000
jobs
will
be
created
in
the
period
from
2014-2018
due
to
the
gendered
investment
plan.
In
this
scenario
it
is
only
the
countries
that
are
part
of
the
gendered
investment
plan
that
are
part
of
the
financing,
but
with
the
spill-over
effects
in
mind,
one
could
argue
that
it
would
only
be
fair
if
all
European
countries,
in
some
way,
were
part
of
the
financing
as
all
countries
to
some
extend
are
benefitting
from
the
plan.
11
As
shown
above
significant
improvements
can
be
made
on
the
labour
market
when
implementing
the
gendered
investment
plan
and
that
even
though
e.g.
increasing
womens
participation
rate
also
mean
a
higher
unemployment
in
the
short
run
until
all
the
women
have
gained
a
foothold
on
the
labour
market.
If
active
labour
market
policies
are
implemented,
in
order
to
help
the
women
to
get
jobs
and
to
be
quickly
integrated
on
the
labour
market,
then
female
employment
can
be
expected
to
increase
even
more,
than
assumed
in
the
alternative
scenario
above.
12