Community, Work & Family, 2015 Vol. 18, No. 4, 395–415, http://dx.doi.org/10.1080/13668803.2015.1080661

Family policies and single parent poverty in 18 OECD countries, 1978–2008 Laurie C. Maldonadoa* and Rense Nieuwenhuisb Luxembourg Income Study (LIS) Center, New York, USA; bSwedish Institute for Social Research (SOFI), Stockholm University, Stockholm, Sweden

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a

(Received 4 June 2014; accepted 4 August 2015) This study examined to what extent family policies differently affect poverty among single-parent households and two-parent households. We distinguished between reconciliation policies (tested with parental leave and the proportion of unpaid leave) and financial support policies (tested with family allowances). We used data from the Luxembourg Income Study Database, covering 519,825 households in 18 OECD countries from 1978 to 2008, combined with data from the Comparative Family Policy Database. Single parents face higher poverty risks than coupled parents, and single mothers more so than single fathers. We found that employment reduces poverty, particularly for parents in professional occupations and for coupled parents who are dual earners. Longer parental leave, a smaller proportion of unpaid leave, and higher amounts of family allowances were associated with lower poverty among all households with children. Parental leave more effectively facilitated the employment of single mothers, thereby reducing their poverty more than among couples and single fathers. We found some evidence that family allowances reduced poverty most strongly among single fathers. An income decomposition showed that family allowances reduce poverty among two-parent households with up to 3 percentage points, and among single-parent households (mothers and fathers) up to 13 percentage points. Keywords: single parents; poverty; family policy; social investment; parental leave; family allowance; employment En este estudio se analizó hasta qué punto las políticas familiares afectan de modo diferente la pobreza entre los hogares monoparentales y los hogares biparentales. Hicimos distinción entre políticas de reconciliación (probadas con permiso parental y la proporción de excedencia sin derecho a sueldo) y las políticas de apoyo monetario (probadas con subsidios familiares). Para este estudio se utilizaron datos del Luxembourg Income Study Database, que abarca 519.825 hogares en 18 países de la OCDE entre 1978 y 2008, combinados con la base de datos Comparative Family Policy. Las familias monoparentales se enfrentan a mayores riesgos de pobreza que las parejas, y las madres de familia monoparental más que los padres de familia monoparental. Determinamos que el empleo reduce la pobreza, en particular en los casos de padres con ocupaciones profesionales y en parejas de doble ingreso. Un permiso parental más prolongado, una proporción menor de excedencia sin derecho a sueldo y mayores montos de subsidios familiares fueron asociados con menores niveles de

*Corresponding author. Email: [email protected] © 2015 Taylor & Francis

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L.C. Maldonado and R. Nieuwenhuis pobreza entre todos los hogares con niños. El permiso parental facilitó con mayor efectividad el empleo de las madres de familia monoparental, lo que de este modo redujo su pobreza más que en el caso de parejas y padres de familia monoparental. Encontramos algunas evidencias de que los subsidios familiares redujeron la pobreza con más fuerza en los casos de padre de familia monoparental. Ulteriores análisis, sobre la base de una descomposición de ingresos, demostraron que los subsidios familiares reducen la pobreza entre los hogares biparentales, hasta en 3 puntos porcentuales y entre los hogares de familia monoparental (madres y padres) hasta en 13 puntos porcentuales.

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Palabras claves: hogares monoparentales; pobreza; política familiar; licencia familiar; asignación familiar

Background and research questions Single-parent households are an increasingly common household structure across OECD countries. Many children will spend at least part of their childhood growing up in a single-parent household (Heuveline, Timberlake, & Furstenberg, 2003; OECD, 2011). Across countries, single-parent households are more likely to be poor than two-parent households and there is much variation in poverty rates across countries (Brady & Burroway, 2012; Gornick & Jäntti, 2009). In the USA, for example, single-parent households have exceptionally high poverty rates as compared to two-parent households, whereas in the Nordic countries, poverty rates of both single- and two-parent households are substantially lower. Many scholars have examined the demographic and institutional factors that explain cross-national variation in poverty rates. For the most part, the research has focused on redistributive policies – taxes and transfers – finding that such policies have been very effective in reducing poverty, especially for single-parent households (Gornick & Jäntti, 2009; Gornick & Meyers, 2003; McLanahan, Casper, & Sorensen, 1995; Rainwater & Smeeding, 2004). However, up to this point, few studies have addressed whether other types of policies, such as family policies, are effective in reducing poverty for single-parent households. The current study seeks to address this gap in the literature, making an important distinction between two types of family policy: reconciliation policies that facilitate combining work and family; and financial support policies that provide financial assistance to families with children (Gauthier, 1996; Nieuwenhuis, Need, & Van der Kolk, 2012; Thévenon, 2011). Reconciliation policies, such as maternity and parental leave, continued pay during leave, public childcare, and early childhood education, have been an important factor in providing parents with opportunities to combine parenthood and employment. Reconciliation policies are linked to poverty reduction, as employment is a protective factor against poverty (Misra, Budig, & Moller, 2007). Many scholars have found that reconciliation policies are particularly effective in shaping women’s employment outcomes (Jaumotte, 2003; Nieuwenhuis et al., 2012; Pettit & Hook, 2009; Van der Lippe, & Van Dijk, 2002). However, it remains to be seen to what extent reconciliation policies can facilitate the employment of single parents and reduce their poverty risk. It has been argued that reconciliation policies have been most instrumental in stimulating dual earners and employment among the higher educated (Nieuwenhuis, 2014; Van Lancker, 2014), in which case single-parent households and those in occupations

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with lower earnings potential, or limited hours, would see only limited gains in terms of employment and reduced poverty risks from these policies. This is all the more relevant as the large majority of single parents are women, and therefore (on average) have less of an employment history than men in addition to facing both a gender and a motherhood wage penalty (Budig, Misra, & Boeckmann, 2012). Financial support policies, such as family allowances and child tax benefits, transfer income to households with children to reduce the cost of raising children. Income transfers have been found to be effective in reducing childhood poverty (Ritakallio & Bradshaw, 2006). Financial support policies, however, were also found to be a disincentive for maternal employment (Dingeldey, 2001; Nieuwenhuis et al., 2012; Schwarz, 2012). In this study, we examine reconciliation policies (paid and unpaid parental leave) and financial support policies (family allowances) and how they differently affect poverty among single-mother, single-father, and two-parent households. Other policies and regulations, such as child support and alimony, are consequential in reducing single parent poverty as well (Garfinkel, 1992; Kunz, Villeneuve, & Garfinkel, 2001). Since these polices are restricted to single-parent households they are not the focus of this study; however, we account for the potential poverty reducing effects of child support and alimony in our analyses. This study is innovative on three accounts. First, most studies on family policy outcomes did not specifically address single-parent households. Single parents, the sole providers and caregivers for their families, are uniquely situated in how they reconcile work and family. Single-parent households have high poverty rates but also have high employment rates (Casey & Maldonado, 2012). Therefore, the combination of reconciliation and financial support policies can be effective to ensure the economic security of single-parent households (Gornick & Meyers, 2003). Second, and related to the previous point, the comparative literature on family policy outcomes has focused on women’s gender role attitudes (Andringa, Nieuwenhuis, & Van Gerven, 2015) or socio-economic background which was typically indicated by education level (e.g. Ghysels & Van Lancker, 2011; Korpi, Ferrarini, & Englund, 2013; Pettit & Hook, 2009). We contribute an explicit focus on household structure and examine the differences in poverty risk between single-mother, single-father, and two-parent household. Third, the specific focus on single-parent households provides an opportunity to further develop our understanding of the different outcomes of reconciliation and financial support policies. As previously stated, reconciliation and financial support policies have different effects on mothers’ employment, and employment is a key factor to reduce poverty. However, the direct financial transfers (family allowances) are also likely to reduce poverty. Therefore, with respect to poverty and in contrast with employment, it could be the case that both types of family policy have the same effect. Therefore, this study answers two questions: (1) To what extent does the poverty risk of single-parent households compared to two-parent households vary across 18 OECD countries from 1978 to 2008? (2) To what extent can cross-national variation in the poverty risk of single-parent households (single mother and single father) compared to two-parent households be explained by variation in countries’ (a) reconciliation policies (leave) and (b) financial support policies (family allowance)?

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398 L.C. Maldonado and R. Nieuwenhuis Theory and hypotheses We derive our hypotheses from a combination of the capability approach to account for household-level determinants of poverty, and comparative welfare state theory to account for country-level determinants. Sen’s (1992) capability approach (also see Hobson, 2011, 2013) has often been used to examine gender (and class) differences in relation to the welfare state (Korpi, 2000). The approach pays attention not only to the inequality of outcomes such as poverty (in capability approach referred to as ‘functionings’), but also on individuals’ agency: the extent to which they are capable of choosing alternative outcomes. The capability approach is inherently contextual, in that it includes social policies (family policies) in the analysis of individuals’ options for doing. The capabilities approach ‘asks us to consider not only what individuals do but also what their opportunities to be and do are’ (Hobson, 2011, p. 148). Part of this context is shaped by the welfare state. Comparative welfare state theory describes the role of the state in the protection and promotion of citizens’ wellbeing. Relevant in this context is the literature on ‘social investment’ (Morel, Palier, & Palme, 2012), which describes an increased focus on stimulating employment as a strategy against poverty. In terms of policies, this translates into a shift from policies providing income transfers toward in-kind policies that increase opportunities for employment (Vandenbroucke & Vleminckx, 2011). The social investment state has been described as aiming to ‘prepare’ individuals and households to become economically independent through employment as opposed to ‘repairing’ poverty through transfers (Morel et al., 2012). This increasing reliance on employment can be particularly consequential for single-parent households, as their capabilities to avoid poverty through employment are not only shaped by the opportunities provided by policies but also by their household structure. Single- and two-parent households differ in the amount of available resources as well as the capability to use resources to avoid poverty. These resources include time, human capital, number of adults who can seek employment, and – very importantly – the ability for partners to share or distribute tasks (cf. Becker, 1991). Twoparent households have two potential adult earners in the household. There is greater opportunity for at least one of the two parents to be employed versus both parents being unemployed. Consequently, these households are better protected against falling into poverty due to (unexpected) unemployment. Two parents who combine resources could have ‘double’ the amount of working time. Alternatively, two parents have greater flexibility to share in the distribution of childcare and household tasks. To further illustrate this point, if a child is sick in a two-parent family the parents have flexibility to decide which parent is best positioned to stay at home and care for the child. Single-parent households, on the other hand, have fewer resources than their twoparent counterparts. Single parents lack income protection from a second earner and are unable to share childcare and household responsibilities with a partner. Singleparent households have more difficulty coping with irregular working hours, while two-parent households have the resources to be more flexible in negotiating the irregularity of their hours. Single parents have a deficit in both time and money, with fewer hours during the day to work and care for their children (Cohen, 2014). Furthermore, the complications add up when, for instance, a single mother is working in a low-wage job without entitlements to parental leave, without childcare, and without flexible

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working hours. If her child is sick, she must choose between work and caring for her child. If she chooses the latter, she will miss work and risk losing her job. Before turning to the role of family policies, we seek to better understand how employment protects against poverty, beyond whether or not a parent is employed. In our study we account for three aspects of employment. First, we focus on the importance of dual earners, as mentioned previously. Two-parent households’ potential for having two earners marks an important distinction from single-parent households. Second, we consider the total amount of working hours in a household. Third, if the head of the household is employed, we account for the type of occupation. Occupations differ substantially in earnings potential, with managers and professionals typically out-earning, for instance, laborers. Moreover, as single parenthood is more common among households with lower socio-economic backgrounds (Putnam, 2015) and as two-parent households have more opportunities to have one earner specialize in paid employment to participate in an occupation with higher earnings potential (cf. Becker, 1991), occupation can possibly explain differences in poverty risks between single- and two-parent households. Employment can potentially also explain difference in poverty between single mothers and single fathers, as women are less likely to be employed than men, on average work fewer hours, and less often in high-earning occupations. This is why we also control for education. Furthermore, irregular and non-standard working hours are likely to have a marked impact on households’ well-being, and much more difficult to negotiate for single parents. In particular, single parents can lose their job, reduce their working hours, or change to an occupation with lower earnings. We cannot account for irregular or non-standard working hours in our data, but such working hours lend further importance to accounting for the aforementioned three aspects of employment. Our explanatory research question pertains to poverty among single- and twoparent households, and particularly to the extent to which family policies affect the difference in poverty between these types of households. We cannot a priori hypothesize unambiguously whether family policies will increase or decrease the poverty of single-parent households relative to two-parent households, as competing positions prevail in the literature on whether households benefit more from (the opportunities provided by) family policies when they have limited resources, or when they have extensive resources. We derive testable hypotheses from both positions. The first position from which we derive a hypothesis pertains to the intended outcomes of family policies. We expect leave to be more consequential to households with limited resources, as these households will have fewer means to compensate for the absence of the opportunities provided by leave. Therefore, we expect leave to be more effective in reducing poverty among single-parent households and in decreasing the poverty of single relative to two-parent households. As continued pay during leave will most effectively benefit those with the fewest resources, we expect that if a large proportion of the parental leave duration is unpaid, this will negatively affect singleparent households. We expect that the additional income from family allowances will more strongly improve the economic position of single-parent households since they are more susceptible to poverty. Thus, we formulate our intended outcomes hypothesis: single-parent households are more likely to be poor than two-parent households, and this difference between single- and two-parent households is smaller in countries that have (a) longer parental leave, (b) a smaller proportion of leave that is unpaid, and (c) higher family allowances.

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400 L.C. Maldonado and R. Nieuwenhuis The second position from which we derive a hypothesis pertains to unintended consequences. This corresponds to the ‘Matthew effect’ (Merton, 1968), which is described as those who have many resources, in this case two-parent households, benefit the most from social policies. Studies have shown that family policy arrangements are, indeed, most effective among households who already have a strong connection to the labor market (Ghysels & Van Lancker, 2011; Nieuwenhuis, 2014; Pettit & Hook, 2009; Van Lancker, 2014). Parental leave is intended to enable parents’ capability to combine caring responsibilities and employment (Fahlén, 2013). However, if a large part of the duration of leave is unpaid, this has the opposite effect because fewer households will be able to take up unpaid leave (Gerstel & McGonagle, 1999). Single-parent households do not necessarily have the resources to benefit from leave, especially if leave is partially paid or unpaid. Single parents are more likely to require their full earnings from employment in order to make ends meet. Therefore, according to our alternative hypothesis, we would expect paid and unpaid leave to be more effective in reducing poverty among two-parent households. There might also be unintended consequences for family allowances. If two-parent households are already close to the poverty line, they may benefit the most from family allowances. Thus, the unintended outcomes hypothesis is: single-parent households are more likely to be poor than two-parent households, and this difference between single- and two-parent households is larger in countries that have (a) longer parental leave, (b) a larger proportion of leave that is unpaid, and (c) higher family allowances. Data and method Data Our hypotheses were tested using the Luxembourg Income Study (LIS, 2015) Database. The LIS Database provides income data on individuals and households that are harmonized to a common template to ensure comparability across countries. The LIS Database also includes variables on household composition and other socio-economic background characteristics. We used 99 data sets from the LIS Database, covering 18 OECD countries from 1978 to 2008 (LIS Waves I to VII). The data sets were selected as a relatively homogeneous group of OECD countries, and based on the availability of countrylevel data. Our sample includes all households in which at least one parent lives with one or more children, and with parents aged between 20 and 55. The countries included in our study are presented in Table 1, combined with the number of household-level observations after list-wise deletion of missing values, the number of data sets per country, and the earliest and latest years in which each country was observed. Measurements In our analyses, we have used information on the individuals in the household to aggregate socio-demographic variables to the household level. This resulted in the following household-level measurements: Poverty: Our dependent variable was a binary indicator of relative poverty. Following common conventions, a household was defined as poor if the disposable cash income of the household was below 50% of the median household income in that

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Table 1. Number of observations, per country (N-household = 519,825 from 99 country-years and 18 countries).

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Country Austria Belgium Canada Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Norway Spain Sweden Switzerland United Kingdom United States Total

Number of data sets

First year

Last year

Number of householdlevel observations

% of observations

6 6 5 5 6 6 6 4 6 10 7 5 5 6 4 4 3 5 99

1987 1985 1987 1987 1987 1978 1984 1995 1994 1986 1985 1990 1986 1980 1992 1992 1999 1994 1978

2004 2000 2004 2004 2007 2005 2007 2007 2007 2008 2007 2007 2004 2007 2005 2004 2007 2007 2008

16,859 8989 43,507 71,570 25,434 26,637 17,450 7222 8605 32,569 7277 12,428 21,100 31,822 16,820 4939 25,397 141,200 519,825

3.24 1.73 8.37 13.77 4.89 5.12 3.36 1.39 1.66 6.27 1.40 2.39 4.06 6.12 3.24 0.95 4.89 27.16 100

Source: Luxembourg Income Study (LIS) Database, Waves I to VII, authors’ calculations.

country. Using disposable household income means that our results account for a variety of country-differences in the redistributive effects of countries’ tax-benefit systems, child support, and alimony regulations, among others. The median household income was determined based on the entire sample of households available in the data, before our subsample was selected. Income was equivalized for differences in household size following LIS conventions, by dividing the total household income by the square root of the number of household members. Single mother/single father: We distinguish between single mothers and single fathers as two binary independent variables, indicating those households where the head of the household is the parent of one or more of the children who live in the same household, while this person is not partnered with any other adult living in the household. As our sample is limited to households with children, the reference category represents two-parent households. Employment: A categorical variable, indicating the current employment status of household members. This variable distinguishes between no earners, single earners, and dual earners. It should be noted that this variable definition reflects the potential employment differences between single- and two-parent households, as the former by definition cannot be a dual-earner household. Occupation household head: This categorical variable represents the occupation of the household head (thus both covering single- and two-parent households) in three International Standard Classification of Occupations (ISCO) categories: Professional/Managerial, Other Skilled Workers (e.g. clerical support workers, technicians, and service workers), and Laborers.

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Working hours: Interval level variable defined as the sum of regular hours worked weekly at all jobs currently held by the household head and his/her partner – if present. Education: Highest level of education of the head of household or his/her partner (if present), recoded for country-comparability to 1 = low, 2 = medium, and 3 = high. Age: Age of the oldest household member (head of the household or – if present – his/her partner). Family allowances: Interval level variable representing the amount of family allowances (in national currency) the household received as part of the disposable cash household income. Note that in addition to this household-level measurement of family allowances, we also used a country-level measure that is described below. The household-level data were combined with country-level data on family policy that were obtained from the Comparative Family Policy Database (Gauthier, 2010). We used three time-varying indicators of family policy per country: Parental leave: is an index of three leave policies: maternity leave, parental leave, and childcare leave, representing the total number of weeks a mother or father is entitled to leave. Unpaid leave: Measured as the percentage of the total leave duration that is unpaid. Family allowances: Measured as the monthly amount of family allowances, averaged for first, second, and third child. To ensure cross-national comparability the amounts of family allowances were expressed as a percentage of the average gross annual earnings of a production worker in a country. Descriptive statistics of both household- and country-level variables are presented in Table 2. Two things should be noted. First, occupation of the household head was not available in all LIS data sets in our analyses (23% of the observations). Therefore, an additional dummy variable was added to account for these missing observations, so that the information in this variable could still be used when available. Second, the percentage of single fathers is very small: (under) 3% of the sample. This means that we cannot differentiate between single mothers and single fathers in our descriptive analyses that follow. However, as single fathers do represent about 14% of all single parents, we differentiate between single mothers and fathers in the regression analyses described below. Statistical methods We employed two distinct and complementary approaches. The first uses regression analyses to examine parental leave and family allowance policies at the country level, and to assess how household-level employment mediates these effects. The second approach is an income decomposition providing a more detailed test of how family allowances at the household level affect poverty among single- and twoparent households. All analyses were performed with STATA and were weighted by household-level sampling weights. For the first approach, we analyze our data using logistic regression, modeling the risk of poverty as a function of single parenthood, family policies, and various socioeconomic variables. We account for the fact that households are nested within countryyears by using cluster corrected standard errors. The advantage of these regression analyses is that they allow for simultaneously modeling the influence of various determinants of poverty, and that can differentiate between single mothers and single fathers. It is, however, not possible to regress poverty on household-level family

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Table 2. Descriptive statistics for household-level and country-level variables (N-household = 519,825 from 99 country-years and 18 countries).

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Variable Household-level Poverty Household structure Couple Single mother Single father Employment No employment Single earner Dual earner Occupation household head No occupation Professional/managerial Other skilled workers Laborers Missing Household working hours Education Low Middle High Age Country-level Leave %Unpaid Leave Family allowances

Min

Max

Mean/proportion

0

1

0.10

–

0 0 0

1 1 1

0.82 0.15 0.03

– – –

0 0 0

1 1 1

0.09 0.40 0.51

– – –

0 0 0 0 0 0

1 1 1 1 1 198

0.14 0.18 0.41 0.05 0.23 37.04

– – – – – 34.37

0 0 0 20

1 1 1 55

0.20 0.45 0.35 40.94

– – – 7.87

70.91 72.43 0.70

62.71 23.61 0.62

10 0 0

213.40 100 2.61

SD

Source: Luxembourg Income Study (LIS) Database, Waves I to VII, and the Comparative Family Policy Database (Gauthier, 2010). Authors’ calculations.

allowances because our measure of poverty was directly derived from household income, and regression analysis is not suited to regress a dependent variable on one or more of its components. Therefore, in the regression analyses we include the country-level indicator of family allowances. While this is informative on the effects of country-level entitlements to family allowances, it cannot account for differences across households in the actual amounts of family allowances received. The second approach compares poverty rates based on the disposable household income before and after family allowances are accounted for (see: Morissens & Sainsbury, 2005). While this type of decomposition cannot account for socio-demographic characteristics, it provides insight into the degree to which poverty is affected by family allowances. In this analysis we do not differentiate between single mothers and fathers, given the small proportion of the latter in our data. The decomposition is performed on a subset of 75 data sets for which household-level measurements on family allowances transfers are available. Pre-transfer poverty is calculated by subtracting family allowances (if any) from disposable household income; the post-transfer analysis is based on disposable household income including family allowances.

404 L.C. Maldonado and R. Nieuwenhuis

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Then, we calculate the difference between the pre and post to determine whether single- and two-parent households benefit to a different degree from family allowances. Analyses To answer our first, descriptive research question, we present trends in poverty in 18 OECD countries of single- and two-parent households in Figure 1. In all countries, and at all times, single-parent households (both single mothers and fathers) were more likely to be poor than two-parent households. In for instance, Canada and the USA, approximately 35–40% of all single-parent households were poor, compared to approximately 10% of two-parent households. In the Nordic countries the poverty rates of both single- and two-parent households were substantially lower. The poverty of single relative to two-parent households increased in Finland, Sweden, and France, while it decreased in the UK, Austria, and Ireland. The first part of our analyses pertaining to our explanatory question is based on regression analyses, the results of which are presented in Table 3. In Model I, the likelihood of a household being poor is regressed on whether the household is headed by a single mother or single father. The results indicate that single-parent households have a higher poverty risk than their two-parent counterparts, and that single mothers face a substantially higher poverty risk than single fathers. Model II shows that employment reduces poverty risks of households, and that dual-earner households face lower risks of poverty than single earner households. Moreover, controlling for employment accounts for a substantial part of the increased poverty risk of single mothers, and renders the estimate for the poverty risk of single fathers statistically insignificant. This suggests that employment and absence of dual earners forms an important explanation of why single mothers and single fathers have a higher risk of poverty compared to two-parent households. In Model III the average impact of employment is unpacked further, by differentiating between occupations. Poverty risks are lower for households in which the head has a professional or managerial occupation, compared to other skilled workers and more so compared to laborers. Occupation accounts for a substantial part of the average poverty reduction associated with single and dual earners, indicating that it is not just employment that is important against poverty, but also the type of employment. Model IV shows that these findings hold up when controlling for working hours, level of education and age. Higher levels of education protect more against poverty, while working hours are not statistically significant. This does not mean that hours do not matter per se, but that how much hours a household can work is strongly associated with household structure, (the potential of) dual earners, and occupation. After focusing on how different aspects of employment are associated with the poverty risk of single mothers and fathers in Table 3, we now turn to family policies in Table 4. Model V shows that longer parental leave is associated with lower poverty risks among households with children, and more strongly among single mothers. In Model VI the employment variables (and controls) are re-introduced. The interaction between leave and single mothers is no longer statistically significant after accounting for differences in employment, indicating that increased employment explains why single mothers benefit from leave: leave facilitates their employment. Model VII shows that if a larger part of the parental leave is unpaid, it runs

Figure 1.

Trends in poverty among single-parent households and two-parent households, 18 OECD countries 1978–2008.

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406 L.C. Maldonado and R. Nieuwenhuis Table 3. Single-parent poverty regressed on household-level employment (N-household = 519,825 from 99 country-years and 18 countries).

I. Baseline

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B Intercept –2.66** Household structure Couple (ref) Single mother 1.50** Single father 0.38** Employment No Employment (ref) Single earner Dual earner Occupation household head No Occupation (ref) Professional/managerial Other skilled workers Laborers Missing Household working hours Education Low (ref) Middle High Age

II. Employment status

III. Occupation

IV. Controls

SE

B

SE

B

SE

B

SE

.06

–1.09**

.24

–0.90**

.12

1.20**

.19

.07 .09

0.67** –0.23

.14 .12

0.64** –0.17

.11 .11

0.58** –0.06

.10 .11

–1.26** –2.50**

.20 .25

–0.56* –1.63**

.25 .31

–0.42 –1.41**

.27 .36

–1.69** –0.99** –0.35 –1.00**

.22 .22 .24 .22

–1.39** –1.09** –0.62** –1.04** 0.002

.19 .19 .23 .20 .002

–0.61** –1.10** –0.04**

.06 .11 .00

Note: All hypotheses tested are two-tailed. Source: Luxembourg Income Study (LIS) Database, Waves I to VII, and the Comparative Family Policy Database (Gauthier, 2010). Authors’ calculations. *P < .05. **P < .01.

counter to the effect of leave, suggesting that only paid leave is associated with reduced poverty. We could not detect that this effect differed significantly between couples, single mothers, or single fathers. In Model VIII we focus on family allowances. We control for leave and unpaid leave, but not for the interaction of those variables with single mothers and fathers. This is to avoid over-specification of the models with too many country-level variables and interactions. The estimates suggest that higher family allowances are associated with lower poverty among all households with children. The interactions show that single mothers do not benefit more from family allowances than couples, but that single fathers benefit most. This could be due to poor single fathers being closer to the poverty line than poor single mothers. However, given the very small proportion of single fathers in the data, we refrain from interpreting this further. After accounting for employment and controls in Model IX we find no benefit from family allowances, except (perhaps) for fathers. Further analyses (not presented here) showed that after accounting for only

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–1.37** –1.05** –0.56* –1.07** 0.00

–0.60** –1.10**

Education Low (ref) Middle High

0.67** 0.05

Occupation household head No occupation (ref) Professional/managerial Other skilled workers Laborers Missing Household working hours

.11 .12

1.67** 0.52**

1.41**

B

–0.38 –1.34**

.09

–2.43**

SE

Employment No employment (ref) Single earner Dual earner

Intercept Household structure Couple (ref) Single mother Single father

B

V. Leave

.05 .11

.19 .20 .23 .20 .00

.27 .36

.14 .15

.20

SE

VI. Leave + Employment

–0.64** –1.15**

–1.37** –1.04** –0.57* –0.99** 0.00

–0.41 –1.34**

0.47 –0.37

1.03**

B

.05 .11

.19 .20 .23 .20 .00

.27 .36

.26 .34

.23

SE

VII. Unpaid Leave

1.52** 0.61**

–2.35**

B

.12 .11

.19

SE

VIII. Family Allowances

.06 .11

.19 .19 .22 .19 .00

.25 .34

.13 .13

.22

SE

(Continued)

–0.62** –1.14**

–1.35** –1.02** –0.52* –0.94** 0.00

–0.46 –1.42**

0.60** 0.17

1.24**

B

IX. Family Allowances + Employment

Table 4. Single-parent poverty regressed on country-level family policies and household-level employment (N-household = 519,825 from 99 countryyears and 18 countries).

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–0.03* –0.02* –0.02

B

V. Leave

.01 .01 .01

SE –0.04** –0.03* –0.01 –0.02

B .00 .01 .01 .01

SE

VI. Leave + Employment

–0.04** –0.03** –0.00 –0.00 0.07** 0.02 0.05

B .00 .01 .01 .01 .02 .03 .04

SE

VII. Unpaid Leave

0.06**

–0.19 –0.05 –0.31*

.02

.12 .00 .12

0.02

–0.25** –0.32 –0.29**

–0.04** –0.03**

B .01

SE

–0.02**

B

VIII. Family Allowances

.12 .11 .14

.02

.00 .01

SE

IX. Family Allowances + Employment

Note: All hypotheses tested are two-tailed. Source: Luxembourg Income Study (LIS) Database, Waves I to VII, and the Comparative Family Policy Database (Gauthier, 2010). Authors’ calculations. *P < .05. **P < .01.

Age Leave (/10) • Single mothers • Single fathers % Unpaid leave (/10) • Single mothers • Single fathers Family allowances • Single mothers • Single fathers

Table 4. Continued.

408 L.C. Maldonado and R. Nieuwenhuis

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employment/dual earners the estimate for family allowances is actually larger, suggesting that part of the effect of family allowances is suppressed by households reducing their employment, for instance, from dual earners to single earners. All in all, our findings are in line with part A of the intended outcomes hypothesis, that longer parental leave more strongly decreased the poverty of single-parent relative to two-parent households. Regarding unpaid leave and family allowances, the results so far provide evidence for neither the intended, nor the unintended, outcomes hypotheses with respect to the difference in poverty between single- and two-parent households, except for single fathers possibly benefitting most from family allowances. Our first approach, using the country-level indicator of family allowances, was not the optimal test of how this transfer affects the differences in poverty risk among single- and two-parent households. Therefore, our second approach further examines the effects of family allowances with a pre/post transfer decomposition presented in Table 5. The first two columns present poverty rates for single- and two-parent households excluding family allowances. These poverty rates vary substantially across countries, and are typically high in Southern European countries and in Ireland. In addition, the results indicate that in all countries poverty is more prevalent among single-parent households than among two-parent households. There are no pre-

Table 5.

Poverty reducing contribution of family allowances in 18 (N = 75 country-years). Pre-family allowances

Country Austria Belgium Canada Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Norway Spain Sweden Switzerland UK USA

Post family allowances

Change in poverty %, associated with family allowances

Coupled

Single

Coupled

Single

Coupled

Single

7.85 5.15 7.73 3.33 5.43 7.69 4.46 11.88 10.36 14.98 7.57 4.47 2.73

22.47 17.57 38.26 16.49 17.42 23.63 33.79 17.57 43.15 19.05 25.42 23.07 24.97

–6.38 –7.10 –0.87 –9.46 –8.58 –4.46 –6.73 –0.48 –4.02 –0.82 –3.08 –5.37 –12.91

10.83 11.00 35.31

16.10 10.47 37.40 7.03 8.85 19.17 27.06 17.09 39.13 18.23 22.34 17.70 12.06 25.16 7.72 10.39 28.52 36.53

–2.73 –1.54 –0.42 –1.05 –2.93 –2.16 –1.32 –0.29 –1.96 –2.05 –3.43 –0.90 –0.90

3.47 5.82 9.26

5.12 3.61 7.31 2.27 2.49 5.53 3.15 11.58 8.40 12.94 4.14 3.57 1.83 13.78 2.50 5.20 7.59 9.87

–0.98 –0.62 –1.67

–3.11 –0.61 –6.78

Notes: Each row presents the average per country, based on observations in multiple years. Table with full results (per year, by country) available upon request. Household-level data on family allowances were unavailable for some data sets, including all data sets from Spain and the USA. Source: Luxembourg Income Study (LIS) Database, Waves I to VII, authors’ calculations.

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L.C. Maldonado and R. Nieuwenhuis

transfer family allowances poverty rates for Spain and the USA. In Spain the data are unavailable at the household level; however, in the USA this reflects the actual absence of the family allowances.1 The next two columns of Table 5, labeled ‘post family allowances’ present poverty rates based on the household income including family allowances. The degree to which family allowances decrease poverty rates – separately for two-parent and single-parent households – are presented in the two columns labeled ‘Change in Poverty %, associated with Family Allowances’. In line with our regression analyses (Models VIII and IX, Table 4), the results indicate that family allowances reduce the risk of poverty among both single- and two-parent households. Moreover, the percentage of households at risk of poverty was reduced to a greater extent among single- as compared to two-parent households. In Italy, the poverty percentage among two-parent households is reduced by 2.05 percentage points, and only with 0.82 percentage points among single-parent households. In Luxembourg, two-parent households also benefitted more. Nevertheless, the overall pattern is that the poverty among two-parent households is reduced less (up to 3.4 percentage points in Luxembourg) than among single-parent households (up to 13 percentage points in Norway). This is in line with part C of our intended outcomes hypothesis. Discussion This study contributed insights in how family policies differently affect poverty among single-parent households and two-parent households. Single parents face higher poverty risks than coupled parents, and single mothers more so than single fathers. Employment reduces poverty, particularly for parents in professional occupations and for coupled parents who are dual earners. Longer parental leave, a smaller proportion of unpaid leave, and higher amounts of family allowances were associated with lower poverty among all households with children. Parental leave more effectively facilitated the employment of single mothers, thereby reducing their poverty more than among couples and single fathers. Family allowances reduce poverty more strongly among single parents and particularly among single fathers. Our findings are in line with key assumptions of the capability approach, in the sense that our findings highlight how the policy context and structure of households matters in shaping opportunities to be and do. Particularly relevant in this respect is our finding that parental leave is associated with lower poverty especially among single-mother households by facilitating their employment, as it highlights the importance of facilitating individuals’ agency to, in this case, avoid poverty. Before turning to policy implications of our findings, we discuss three limitations. First, due to the use of cross-sectional data we cannot infer causality from the associations at the level of the household. We also could not determine whether poor households are more likely to become single-parent households, or that single-parent households are more likely to become poor (or both). The main focus of our analyses, however, was on the country level. At this level, we did observe each country repeatedly. Second, we could not observe the relationship single parents have with the other parent of their child(ren). Therefore, while our income variable included alimonies, we could not analyze other resources received from the other parent. Therefore, it could be the case that while the single-parent household was poor, the child(ren)

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living in it were not. This means that our findings pertain to household poverty, and not to rates of child poverty. Nevertheless, the hypotheses we set out to test were based on arguments on how family policies affected the parents across countries, and these hypotheses could be tested with the data at hand. Third, inherent to the broad country-comparative nature of our study, our data did not allow us to model every relevant detail of single parent poverty and family policies. Our first data limitation was that we could not model the effects of irregular working hours, whereas it becomes increasingly clear in the literature that irregularity of working hours puts a burden on work-life balance (Frase & Gornick, 2013). Such irregularity of working hours would likely further increase the differences between single- and two-parent households: single parents have more difficulty to cope with irregular working hours, while two parents have the resources to be more flexible in negotiating the irregularity of their hours. Future research could test this hypothesis. Our second data limitation was that we could not capture all the detailed institutional differences of the countries included in our study. For instance, we did not address ‘daddy quotas’ of when a father does not take parental leave, the family loses the leave (although in the period studied, uptake of leave among fathers was typically very low), nor any specific qualifying conditions. Similarly, with respect to family allowances, we observed the actual amount of transfers received, but did not model the impact of exact rules and conditions for households to qualify for such allowances. Future studies could examine the consequences for single parents of such qualifying conditions, such as means testing, using detailed tax-benefit micro-simulations offered by EUROMOD (Sutherland & Figari, 2013). Nevertheless, our findings are in line with Bradshaw and Finch (2002), who reported that, for instance, in the Nordic countries the design of family allowances was favorable to single-parent households, resulting in a relatively large reduction of poverty among single parents. In other countries, including notably Luxembourg, the design was more favorable two-parent households. Policy implications In this last section, we highlight three findings that are relevant to current policy developments and debates. First, we derived hypotheses on both intended and unintended outcomes of family policies, from two contrasting positions prevailing in the literature. The key distinction between these two positions was whether family policies most benefit those who have many resources, or those with fewer resources. Parental leave was found to decrease the poverty between single relative to two-parent households, and family allowances were found to decrease poverty to a larger extent among single-parent households than among two-parent households (that were less likely to be poor to begin with). Thus, these findings generally contradict the notion of the ‘Matthew effect’ that family policies benefit resource-rich households most in poverty reduction (Ghysels & Van Lancker, 2011; Merton, 1968; Van Lancker, 2014). Instead, this study showed how family policies benefit all households with children, especially those with the least resources, in this case: singleparent households. Second, our findings show relevance for the social investment developments to ‘prepare’ individuals for economic independence, rather than ‘repairing’ adverse outcomes such as poverty. We indeed found that employment was associated with a

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412 L.C. Maldonado and R. Nieuwenhuis substantial reduction of poverty risks of single-parent households. Moreover, parental leave was found to reduce poverty by facilitating employment, particularly among single mothers. This latter finding is likely driven by two mechanisms: reconciliation policies facilitating the employment of (1) current single mothers with young children and of (2) mothers in couples before becoming a single parent – thereby increasing the likelihood of (maintaining) employment after separating. This latter mechanism is of particular interest to the social investment literature, as it highlights how (policies facilitating) current employment also forms an investment in capabilities to maintain future economic well-being. Future research could use longitudinal data to disentangle these mechanisms to test this hypothesis. Finally, also pertaining to social investment, we found that after controlling for employment, working hours and occupation, single mothers still faced higher poverty risks than couples and single fathers. This could be due to women facing both a gender and a motherhood wage penalty (Budig et al., 2012), pointing toward the importance of fair wage policies. It also suggests that employment alone is not always enough to combat poverty, and that after stimulating employment family allowances can still make a difference. However, family allowances are regarded a ‘disincentive’ for women’s employment (Schwarz, 2012) and indeed found to suppress the labor force participation of mothers (Jaumotte, 2003; Nieuwenhuis, 2014; Thévenon, 2011). Thus, reconciliation policies are in line with this goal of the social investment state, whereas family support policies seemingly are not. However, another aspect of social investment is early childhood development (Morel et al., 2012) and the prevention of childhood poverty. Our findings clearly indicate that with regard to this latter goal of social investment, both leave and family allowances are required to reduce poverty among households with children. To conclude, this study has shown that family policies have been instrumental in reducing poverty among all families with children. In this particular context, concerns for ‘Matthew effects’ were unwarranted as single-parent households, those households with the fewest resources, were found to benefit most from family policies. In line with social investment developments, paid parental leave facilitating employment was effective in reducing poverty, particularly among single mothers. Nevertheless, after disparities between single-parent and two-parent families in income from employment were accounted for, family allowances were still found to substantially reduce poverty, and particularly so among single-parent households. This suggests that successful poverty alleviation among single parents requires a combination of policies that facilitate employment and policies that transfer income to families with children.

Acknowledgements We are grateful for the insightful comments by the LIS team, attendants of ‘Introduction to LIS’ and ‘Should Welfare States Target Single-Parent Families?’ workshops at the Work Family Researchers Network 2014 conference, and in particular for the contributions of Janet Gornick, and the editor and anonymous reviewers of Community, Work, & Family.

Disclosure statement No potential conflict of interest was reported by the authors.

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Funding Parts of this research were supported by the AFR Ph.D. Grant 4039120 of the Fonds National Recherche of Luxembourg.

Note

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1. The USA does not have a national family allowance program, however, the USA does provide federal and state income tax credits to many working low-income families (the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC)). These tax credits are accounted for in our data.

Notes on contributors Laurie Maldonado is a doctoral candidate in Social Welfare at UCLA and is a predoctoral scholar at LIS (Luxembourg Income Study). She is the recipient of the Ph.D. grant awarded by the Fonds National Recherche of Luxembourg, which supports her research that examines the consequences of social policy on the lives of single parents and their families in the USA and across countries. Laurie co-authored, with Tim Casey from Legal Momentum, ‘Worst Off: Single-Parent Families in the United States: A Cross-National Comparison of Single-Parenthood in the U.S. and Sixteen Other High-Income Countries’. Rense Nieuwenhuis is a sociologist interested in how the interplay between social policies and demographic trends gives rise to economic inequalities. His publications appeared in the Journal of Marriage and Family and the European Sociological Review, among other journals. In 2014, he obtained a Ph.D. (‘Cum Laude’) from the University of Twente in the Netherlands, and currently he is an assistant professor at the Swedish Institute for Social Research (SOFI).

ORCID Rense Nieuwenhuis

http://orcid.org/0000-0001-6138-0463

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