Women and Low-Skilled Workers: Efforts in Other Countries to Help
These Workers Enter and Remain in the Workforce (14-JUN-07,
GAO-07-989T).
Increasing retirements and declining fertility rates, among other
factors, could affect the labor force growth in many developed
countries. To maintain the size and productivity of the labor
force, many governments and employers have introduced strategies
to keep workers who face greater challenges in maintaining jobs
and incomes, such as women and low-skilled workers, in the
workforce. This testimony discusses our work on (1) describing
the policies and practices implemented in other developed
countries that may help women and low-wage/low-skilled workers
enter and remain in the labor force, (2) examining the change in
the targeted groups' employment following the implementation of
the policies and practices, and (3) identifying the factors that
affect employees' use of workplace benefits and the resulting
workplace implications. The testimony is based on a report we are
issuing today (GAO-07-817). For that report, we conducted an
extensive review of workforce flexibility and training strategies
in a range of developed countries and site visits to selected
countries. Our reviews were limited to materials available in
English. We identified relevant national policies in the U.S.,
but did not determine whether other countries' strategies could
be implemented here. The report made no recommendations. The
Department of Labor provided technical comments; the Department
of State had no comments on the draft report.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-989T
ACCNO: A70765
TITLE: Women and Low-Skilled Workers: Efforts in Other Countries
to Help These Workers Enter and Remain in the Workforce
DATE: 06/14/2007
SUBJECT: Child care programs
Comparative analysis
Employee training
Employees
Employment assistance programs
Family leave
Fringe benefits
Labor force
Parents
Policy evaluation
Women
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GAO-07-989T
* [1]Summary
* [2]Background
* [3]Countries Have Various Policies and Practices That May Help
* [4]Family Leave Policies Differed in Four Major Ways, Including
* [5]Flexible Working Arrangements Help Employees Balance Work an
* [6]Child Care Policies Assist Working Parents
* [7]Training Programs Can Be Targeted at the Unemployed or Low-S
* [8]Although Certain Workplace Policies Are Associated with Incr
* [9]Child Care and Paid Family Leave Are Associated With an Incr
* [10]The Effects of Most Workplace Policies and Practices, Includ
* [11]While Several Factors Affect Uptake, Employees' Use of Workp
* [12]Concluding Observations
* [13]GAO Contact and Staff Acknowledgments
* [14]GAO's Mission
* [15]Obtaining Copies of GAO Reports and Testimony
* [16]Order by Mail or Phone
* [17]To Report Fraud, Waste, and Abuse in Federal Programs
* [18]Congressional Relations
* [19]Public Affairs
Testimony before the Joint Economic Committee
United States Government Accountability Office
GAO
For Release on Delivery
Expected at 10:00 a.m. EDT
Thursday, June 14, 2007
WOMEN AND LOW-SKILLED WORKERS
Efforts in Other Countries to Help These Workers Enter and Remain in the
Workforce
Statement of Kay E. Brown, Acting Director
Education, Workforce, and Income Security Issues
GAO-07-989T
Madam Vice-Chairwoman and Members of the Committee:
I am pleased to be here today to discuss the policies and practices of
other countries that may help women and low-skilled workers enter and
remain in the labor force. My testimony is drawn from our report Women and
Low-Skilled Workers: Other Countries' Policies and Practices That May Help
These Workers Enter and Remain in the Labor Force ( [20]GAO-07-817 ),
being released this morning. Our work (1) describes the policies and
practices implemented in other developed countries that may help women and
low-wage/low-skilled workers enter and remain in the labor force, (2)
examines the change in the targeted groups' employment following the
implementation of the policies and practices, and (3) identifies the
factors that affect employees' use of workplace benefits and the resulting
workplace implications.
Increasing retirements and declining fertility rates, among other factors,
could affect the labor force growth in many developed countries. To
maintain the size and productivity of the labor force, many governments
and employers in developed countries have introduced strategies to keep
workers who face greater challenges in maintaining jobs and incomes, such
as women and low-wage/low-skilled workers, in the workforce throughout
their working lives. To help women remain in the labor force consistently,
many governments and employers have established leave policies and
flexible working arrangements to assist women in simultaneously managing
responsibilities both inside and outside the workplace. To help
low-skilled workers find jobs and remain in the labor force, governments
and employers have invested in education and training.
We conducted an extensive literature review of workplace flexibility and
training strategies in a range of developed countries to provide
descriptive information about some of their policies and practices. We
conducted site visits and/or interviews in four developed
countries--Canada, the United Kingdom (UK), the Netherlands, and
Denmark--selected for the variety of work-family and workforce development
policies they have adopted. We interviewed government officials,
researchers, private employers, trade associations, and unions in each of
the countries about their experiences with such policies and practices. We
interviewed officials from several European Union (EU) institutions in
Belgium. We reviewed four other countries (France, Ireland, New Zealand,
and Sweden) using literature reviews and discussions with U.S. and
foreign-based researchers. To provide context, we identified relevant
national policies in the United States. However, we did not conduct a
comprehensive review of similar workplace flexibility and training
strategies in the United States, nor did we seek to determine whether
other countries' strategies could be implemented here. Our review of
related laws and regulations of the other countries relied on secondary
sources of analysis rather than independent analysis of foreign laws. Our
review of relevant literature, laws, and regulations was limited by the
extent that specific information from secondary sources was accessible and
written in English.
We conducted our work between July 2006 and May 2007 in accordance with
generally accepted government auditing standards. We made no
recommendations in the report. The Department of Labor provided technical
comments on the report, which we incorporated where appropriate. The
Department of State did not have comments on the report.
Summary
In summary, governments and employers in the countries we studied
developed a variety of laws, government policies, and formal and informal
practices to help women and low-wage/low-skilled workers enter and remain
in the workforce. For example, governments may offer paid leave of varying
lengths for new parents, subsidize the costs of child care, and offer
training and apprenticeship programs to help the unemployed find jobs and
to help those already in the workforce advance in their careers. For
example, in Denmark, employed women are allowed 18 weeks of paid maternity
leave; the United States provides up to 12 weeks of unpaid family leave.
To subsidize child care costs, the Canadian government provides $100 a
month for each child under age 6 to eligible parents. Denmark also has had
a public system in place since the mid-1960s that allows low-skilled
workers to receive free education, wage subsidies, and funding for
transportation costs. While evidence from cross-national studies shows
that child care and paid maternity leave are positively related to women's
employment, research on training programs has shown mixed results. It is
difficult to attribute effects to a specific policy, however, for a
variety of reasons. For example, some policies simply codified into law a
widely used practice: In one case, it was very common for Dutch women to
choose to work part-time even before legislation passed that promoted
employees' rights to reduce their working hours, according to a Dutch
government official. When policies are in place, many factors can affect
whether employees take full advantage of benefits, and use of these
benefits can have implications for employers and employees. For example,
while employees are more likely to take family leave if they feel that
their employer is supportive, low-wage workers cannot always afford to
take all of their unpaid leave. Employees' personal experiences can also
affect their uptake of benefits. For example, employees may be reluctant
to take advantage of workplace training if they have had negative
experiences with education in the past. The uptake of available benefits
can also have larger implications for an employee's career. Long parental
leaves, for example, may lead to an actual or perceived deterioration in
women's labor market skills, according to an EU report, and can have
negative effects on future earnings.
Background
According to the Department of Labor, in 2005, about 60 percent of U.S.
women age 16 and older were in the workforce, compared to 46 percent in
1975. Some U.S. employers offer alternative work arrangements to help
workers manage both work and other life responsibilities.1 One type of
alternative work arrangement allows workers to reduce their work hours
from the traditional 40 hours per week, such as with part-time work or job
sharing.2 The Family and Medical Leave Act (FMLA) of 1993 requires most
employers to provide workers 12 weeks of unpaid leave from work for a
variety of reasons, such as childbirth, caring for relatives with serious
health conditions, or other personal reasons, such as their own serious
health condition or the adoption of a child, and employers must guarantee
workers a similar job upon return.3 Some arrangements adopted by
employers, such as flextime, allow employees to begin and end their
workday outside the traditional 9-to-5 work hours. Other arrangements,
such as telecommuting from home, allow employees to work in an alternative
location. Child care facilities are also available at some workplaces to
help workers with their care giving responsibilities. In addition to
benefiting workers, these arrangements may also benefit employers by
helping them recruit and retain workers.4
1For a listing of companies that have implemented various workplace
flexibility initiatives, see the Families and Work Institute,
[21]www.familiesandwork.org , and the Great Place to Work Institute,
[22]www.greatplacetowork.com .
2Part-time work schedules allow employees to reduce their work hours from
the traditional 40 hours per week in exchange for a reduced salary and
possibly prorated benefits. Job sharing--a form of part-time work--allows
two employees to share job responsibilities, salary, and benefits of one
full-time position.
3The law applies to private companies with 50 or more employees, and all
federal, state, and local government agencies. However, employers are not
required to extend this job protection to certain "highly compensated
employees," as that term is defined by the act. 29 U.S.C. S 2614(b). To be
eligible for leave, employees seeking leave must have worked for their
employer for at least 1 year and for over 1,250 hours during the last
year.
The federal government also provides child care subsidies for certain
low-income families, and tax breaks for most parents, both to support
their ability to work and to balance work-family responsibilities. Under
programs funded by the Child Care and Development Fund,5 Temporary
Assistance for Needy Families (TANF) and state resources, states have the
flexibility to serve certain types of low-income families. The Head Start
program provides comprehensive early childhood education and development
services to low-income preschool children, on a part- or full-day basis.
Last, the Child and Dependent Care Tax Credit allows parents to reduce
their tax on their federal income tax return if they paid someone to care
for a child under age 13 or a qualifying spouse or dependent so they could
work or look for work.6
In addition, the federal government offers workforce development and
training programs designed to assist low-wage/low-skilled workers in the
United States. The Workforce Investment Act (WIA) of 1998 requires states
and localities to bring together a number of federally funded employment
and training services into a statewide network of one-stop career centers.
7 Low-skilled workers and dislocated workers can choose the training they
determine best for themselves, working in consultation with a case
manager. Additionally, the federal government provides tax breaks and
incentives for companies to hire low-income workers, public assistance
recipients, and workers with disabilities.
4Paid leave had been the most costly benefit to employers, but by 2005,
the cost of health insurance equaled that of paid leave. See GAO, Employee
Compensation: Employer Spending on Benefits Has Grown Faster Than Wages,
Due Largely to Rising Costs for Health Insurance and Retirement Benefits,
[23]GAO-06-285 (Washington, D.C.: Feb. 24, 2006).
5The Child Care and Development Fund (CCDF) is administered by the
Department of Health and Human Services (HHS) and provides block grants to
states, which use the grants to subsidize the child care expenses of
families with children under age 13, if the parents are working or in
school and family income is less than 85 percent of the state median.
Child care services are provided on a sliding fee scale basis, and parents
may choose to receive assistance through vouchers or certificates, which
can be used with a provider of the parents' choice, including religious
providers and relatives.
6To qualify, the spouse, children over the age of 13, and other dependents
must be physically or mentally incapable of self-care and must have the
same principal abode as the taxpayer for more than one-half of the taxable
year. The credit is a percentage of the amount of work-related child and
dependent care expenses paid to a care provider. The credit can be up to
35 percent of qualifying expenses, depending upon income.
7GAO, Workforce Investment Act: Employers Found One-Stops Centers Useful
in Hiring Low-Skilled Workers; Performance Information Could Help Gauge
Employer Involvement, [24]GAO-07-167 (Washington, D.C.: December 2006).
Most of the countries we studied are members of the European Union,8 which
provides minimum standards or basic rights for individuals across member
states. For example, the 1997 directive on equal treatment of part-time
work mandates that people holding less than full-time jobs be given
prorated pay and benefits without discrimination.9 EU directives are
generally binding in terms of the results to be achieved,10 but an opt-out
option occasionally allows member states to delay action. Additionally, in
2000, member states have agreed to increase the number of women in
employment, the number of adults in lifelong learning, and the provision
of child care by the end of the decade. The EU offers financial support to
its member states to help them succeed in employment goals.11
Other differences are relevant to consideration of the workforce
attachment policies of our study countries. Although U.S. women have high
levels of educational attainment, their workforce participation, in
general, is lower than that of the countries we studied. While a higher
education level is associated with greater likelihood of labor force
participation, labor force participation for U.S. women is lower than that
in any of our study countries except Ireland and New Zealand (see table
1).
8These include Denmark, France, Ireland, the Netherlands, Sweden and the
UK. The EU is an economic and political union established in 1993 by the
Maastricht Treaty to expand the scope of the European Economic Community
and provide for the creation of a European Central Bank and the adoption
of a common currency, the euro.
9EC Council Directive 97/81/EC; members may choose to make exceptions for
workers engaged in casual work
10 Member states are bound by the objectives laid down by the directives
but are left the choice of how to achieve these objectives
11The EU will allocate 0.9 billion euros, or more than $1 billion, for
education and training in its 2007 budget, a 31 percent increase from
2006. For example, countries can request money from the European Social
Fund (ESF) for public or private programs that improve people's skills and
employability. The ESF was created in 1957 and is EU's main source of
support, helping member states combat unemployment, prevent people from
dropping out of the labor market, and promote training.
Table 1: Total Fertility Rates and Women's Labor Market Participation
Labor force participation
Total fertility rate of rates of women, ages 25-54,
Country women, ages 15-49, 2004a 2004
Sweden 1.75 85.3%
Denmark 1.78 84.9%
Canada 1.53 81.5%
France 1.91 80.3%
The Netherlands 1.73 77.4%
The UK 1.76 76.8%
The United States 2.05 75.3%
New Zealand 2.01 75.2%
Ireland 1.93 67.9%
Source: OECD Employment Outlook 2006: Boosting Jobs and Income (OECD,
2006) and OECD in Figures, 2006-2007 (OECD, 2006).
aThe fertility rate is defined as the total number of children born per
1,000 women of childbearing age
However, working women in the United States are more likely to work
full-time than those in all other study countries except Sweden or
Denmark. In the Netherlands, a country where 36 percent of all employment
is part-time, women constitute more than three-quarters of employees
working less than 30 hours per week.
Differences in taxation across countries reflect economic and social
priorities. The ratio of total tax revenues to gross domestic product
(GDP) is a commonly used measure of state involvement in national
economies. Countries with high tax-to-GDP ratios generally pay more from
the public budget for services that citizens would have to pay for
themselves--or do without--in lower-taxed countries. In 2004, Sweden had
the highest tax revenue as a percentage of GDP among our study countries,
at 50.4 percent. Denmark came next at 48.8 percent, followed by France at
43.4 percent. The United States had the lowest tax revenue as a percentage
of GDP in 2004, at 25.5 percent. (See table 2.)
Table 2: Total Federal Tax Revenue as a Percentage of GDP
Country Percentage of GDP, 2004
Sweden 50.4
Denmarka 48.8
Francea 43.4
Netherlands 37.5
United Kingdom 36.0
New Zealand 35.6
Ireland 30.1
Canada 33.5
United States 25.5
Source: OECD Revenue Statistics 2006
aThe total tax revenue has been reduced by the amount of the capital
transfer that represents uncollected taxes.
Countries Have Various Policies and Practices That May Help Some Women and
Low-Wage/Low-Skilled Workers Enter and Remain in the Labor Force
Governments and employers in the countries we studied developed a variety
of laws, government policies, and formal and informal practices, including
periods of paid leave (such as maternity, paternity, or parental leave),
flexible work schedules, child care, and training that may help women and
low-wage/low-skilled workers enter and remain in the labor force. In
addition to family leave for parents, countries provide other types of
leave, and have established workplace flexibility arrangements for
workers. All of the countries also subsidize child care for some working
parents through a variety of means, such as direct benefits to parents for
child care and tax credits. Last, governments and employers have a range
of training and apprenticeship programs to help unemployed people find
jobs and to help those already in the workforce advance in their careers.
Family Leave Policies Differed in Four Major Ways, Including Eligibility
Requirements and Length, Payment, and Flexibility
Many countries have developed and funded parental leave policies to assist
employees in combining their work and family lives, recognizing, in part,
the need to promote women's participation in the labor force. A 1996
directive of the European Council requires all countries in the
EU--including each of the European countries we reviewed--to introduce
legislation on parental leave that would provide all working parents the
right at least 3 months of leave--preferably paid--to care for a new baby.
In the United States, the FMLA allows approximately 3 months of unpaid
leave. Some of the countries we studied are social welfare states, and
generally fund family leave payments through tax revenues and general
revenues. For example, Canada, the UK, and the Netherlands fund paid leave
policies in part through national insurance programs, which use payroll
taxes paid by employers and employees. Denmark's paid maternity,
paternity, and parental leaves are financed by income tax revenues through
an 8 percent tax on all earned income.12
Many national leave policies in our study countries require employees to
work for a period of time before they can take leave, giving employers
assurances that employees are committed to their jobs. For example, in
Denmark, employed women with a work history of at least 120 hours in the
13 weeks prior to the leave are allowed 18 weeks of paid maternity
leave.13 In some countries, though, all parents are entitled to take
family leave. In Sweden, all parents are entitled to parental benefits
whether or not they are working. In the UK, by law, all expectant
employees can take up to 52 weeks of maternity leave, regardless of how
long they have worked for their employer.
To enhance workers' ability to take leave, the countries we studied
replace all or part of the wages they forgo while on leave. Dutch
employees on maternity leave and their partners are entitled to receive
100 percent of their wages, up to a maximum. In the UK, women who meet
qualifying conditions of length of service and who earn a minimum amount
for the national insurance system can receive up to 90 percent of their
earnings.14 In Ireland, women can generally be paid at 80 percent of
earnings, subject to their contributions into the social insurance system.
However, employers may offer more leave than legally required.
Leave is often intended to help parents care not just for newborns. In the
Netherlands, Sweden, Denmark, and the UK, parents have the option of using
their leave flexibly by dividing it into discrete parts, sometimes with
the consent of an employer. In the Netherlands, for example, parents may
divide the leave into a maximum of three parts and can take the leave
simultaneously or following one another. The Netherlands, Sweden, and
Denmark allow parents the use of parental leave until their child turns
either 8 or 9, while the UK allows the use of parental leave until a child
turns 5.
12The 8 percent mandatory contribution also funds other social benefits,
including sick leave, active labor market policies, and retirement
policies, according to a government official.
13Persons who are self-employed, have completed vocational training for a
period of 18 months, are doing paid work placement as part of a vocational
training course, or are unemployed may also be eligible for cash benefits
following the birth of a child.
14The rate of statutory maternity pay is 90 percent of a woman's average
weekly earnings for the first six weeks, followed by the lesser of a flat
rate--currently -L-108.85 a week--or 90 percent of her average weekly
earnings for the remaining 33 weeks. Employers who are liable to pay
statutory maternity pay may reclaim 92 percent of the amount they pay from
Her Majesty's Revenue and Customs. Statutory payment was extended in April
2007 from 26 to 39 weeks.
Further, some countries allow workers to take leave to care for other
family members. In Canada, all employees are eligible to take 8 weeks of
unpaid leave to provide care and support to a seriously ill family member
or someone considered as a family member.15 In other countries, the leave
is more limited. New Zealand requires that all employers provide a minimum
of 5 days of paid sick leave for an eligible employee's own illness or to
care for family members.16
Flexible Working Arrangements Help Employees Balance Work and Private
Responsibilities
A few countries have also developed national policies that promote
flexible work opportunities, apart from leave. Dutch law gives eligible
employees the right to reduce or increase working hours for any reason.17
Employers can deny the request only if the change would result in a
serious obstacle, such as not having enough other workers to cover the
hours an employee wishes to reduce. Similarly, British law allows workers
to request changes to the hours or location of their work, to accommodate
the care of children and certain adults.18 According to government
officials from the UK Departments of Trade and Industry, and Communities
and Local Government, this law provides the government with a
cost-effective means to help women return to work. Although similar to the
law in the Netherlands, this law gives employers in the UK more leeway to
refuse an employee's request.
15The definition was expanded in 2006 beyond those caring for parents,
children, and spouses to include persons caring for other family
members--such as siblings, grandparents, aunts, and uncles--and others
considered like family members. Persons must be deemed at risk of dying
within 26 weeks.
16To be eligible, an employee must have worked for 6 months continuously
for the same employer or be deemed eligible at the discretion of his or
her employer. The leave may be used for an employee's own illness or can
be used to care for a spouse or dependent, including a child or elderly
parent.
17The law is the Working Hours Adjustment Act of 2000. To be eligible for
the Working Hours Adjustment Act of 2000, an employee must work in an
organization with more than 10 workers, and must have been employed for at
least a year by the time his/her work hours would be adjusted.
18The Right to Request Flexible Working and Duty to Consider law,
sometimes referred to as "soft touch," became effective in 2003. Eligible
employees must also have worked for their employer continuously for 26
weeks at the time the application is submitted. Children have to be under
6 or have a disability. Adults must be a spouse, partner, civil partner,
or relative, or live at the same residence as the employee submitting a
request.
Flexible working opportunities for employees are often adjusted or
developed by individual employers. Many employers extended the Right to
Request provisions to all employees, for example. In other cases,
employers have developed new opportunities. One local government employer
in the UK offers employees the ability to take a career break for up to 5
years to care for children or elders, with the right to return to the same
position. Employees of the organization are also able to take time off
when children are home on holidays, share the responsibilities of one
position with another employee through the practice of job sharing, and
vary their working hours. In Denmark, a large employer allowed an employee
who was returning to work from a long-term illness to gradually increase
her working hours until she reached a full-time schedule over the course
of several months. Flexible working arrangements in the United States have
been adopted by some employers, but are not mandated in federal law.
Child Care Policies Assist Working Parents
All of our study countries have made a public investment in child care, a
means of allowing women to access paid employment and balance work and
family, according to the European Commission. In Canada, the government
provides direct financial support of $100 a month to eligible parents for
each child under 6. In New Zealand, support is available through a child
care tax credit of $310 per year to parents who have more than $940 in
child care costs. Researchers have reported that, like leave benefits,
early childhood education and care services in European countries are
financed largely by the government.19 According to these researchers,
funding is provided by national, state, or regional and local authorities,
and the national share typically is dominant in services for preschool-age
children. These researchers also reported that care for very young
children and, to a lesser extent, for preschool children is partially
funded through parental co-payments that cover an average of 15 percent to
25 percent of costs.
19Janet C. Gornick and Marcia K. Meyers, "Support for Working Families:
What the United States Can Learn from Europe" The American Prospect,
(2001), 12:1.
In some countries the provision of early childhood care and education is
viewed as a social right, in others as a shared responsibility. In Sweden
and Denmark, parents are guaranteed a place in the state child care system
for children of a certain age, according to the European Commission. More
than 90 percent of Danish children are in publicly supported child care
facilities, according to a Danish researcher. Other countries view the
provision of child care as a responsibility shared among government,
employers, and parents. In the Netherlands, overall, employers, employees,
and the government are each expected to pay about one-third of child care
costs, according to a report by the European Commission.
Aside from public support for child care, some employers in the countries
we reviewed offered additional resources for their employees' child care
needs. For example, although not mandated to do so by law until January
2007, many employers in the Netherlands had been contributing towards
their employees' cost for child care. In the Netherlands, about two-thirds
of working parents received the full child care contribution from their
employers, according to a recent survey.20 In addition, a Canadian union
negotiated employer subsidies to reimburse some child care expenses for
its members, according to union representatives.
Training Programs Can Be Targeted at the Unemployed or Low-Skilled Workers
Our study countries provide services in a variety of ways to help both the
unemployed and low-skilled workers to develop their skills. The percentage
of GDP that each country spends on training programs varies. (See table
3.)
20The survey was commissioned by the Dutch Ministry of Social Affairs and
Employment.
Table 3: Public Expenditures on Training Programs
Public expenditures on training as a percentage of GDP
Country 2003-2004
Denmark 0.54
The Netherlands 0.36
Sweden 0.35
France 0.31
Ireland 0.18
New Zealand 0.18
The UK 0.13
Canada 0.12
The United States 0.05
Source: OECD Employment Outlook 2006: Boosting Jobs and Income (OECD,
2006)
Note: Includes institutional, or vocational, training; workplace
integrated training; and special support for apprenticeship programs.
To help the unemployed develop the skills necessary to obtain work, our
study countries provided various services, including providing training
directly and giving employers incentives to provide training or
apprenticeships. In Denmark, to continue receiving unemployment benefits
after 9 months, the unemployed are required to accept offers, such as
education and training, to help them find work.21 Particular groups of the
unemployed that may face difficulty in finding employment, such as women
and the low-skilled, may be offered training sooner. Employers in Denmark
may receive wage subsidies for providing job-related experience and
training to the unemployed, or for providing apprenticeships in fields
with a shortage of available labor. In the United States, training
services generally are provided by WIA programs, which are provided by
government.
Local governments and private entities also seek to help the unemployed
obtain and upgrade skills. For example, a local government council in the
UK provides unemployed women training in occupations in which they are
underrepresented, such as construction and public transport. While the
women are not paid wages during the typical 8-12 weeks of training, they
may receive unemployment insurance benefits as well as additional support
for child care and transportation. Additionally, a privately run
association in the Netherlands provides entrepreneurial training to women
who have been on public assistance for at least 10 years to start their
own businesses, according to an organization official. Both of these
initiatives were funded jointly by the local governments and the European
Social Fund.
21In addition to mandatory offers of education and training, for example,
the Danish model known as "flexicurity" includes a high degree of labor
market flexibility and generous unemployment benefits.
Our study countries also have training initiatives focused on those
already in the workforce. For example, Canada introduced an initiative to
ensure that Canadians have the right skills for changing work and life
demands.22 The program's goal is to enhance nine essential skills that
provide the foundation for learning all other skills and enable people to
evolve with their jobs and adapt to workplace changes, according to the
government. Denmark has had a public system in place since the mid-1960s
that allows low-skilled workers to receive free education, wage subsidies,
and funding for transportation costs. About one-half of unskilled workers
took part in training courses that were either publicly financed or
provided privately by employers in the past year, according to a Danish
researcher. The UK has also developed an initiative which offers employers
training assistance to meets their needs. The UK's Train to Gain program,
based on an earlier pilot program, provides employers free training for
employees to achieve work-related qualifications. To qualify for Train to
Gain, employers need to agree to at least a minimum level of paid time
that employees will be allowed to use for training. Employers with fewer
than 50 full-time employees are eligible for limited wage subsidies. Train
to Gain also provides skills advice to employers and helps match business
needs with training providers. The UK Leitch Review recommended that the
government provide the bulk of funding for basic skills training and that
all adult vocational skills funding be routed through programs such as
Train to Gain.23
22The Essential Skills and Workplace Literacy Initiative was introduced in
2003.
23A comprehensive review commissioned by the UK government showed that
less than half of those with no qualifications are employed, compared to
90 percent of those with graduate-level qualifications. Such findings
showed that skills across the UK lag behind those of its competitors,
particularly with regard to basic and vocational skills. For example, more
than one in three adults do not hold the equivalent of a basic school
qualification, nearly one in two has difficulty with numbers, and one in
seven is functionally illiterate. See the Leitch Review of Skills:
Prosperity for All in the Global Economy (H.M. Treasury, December 2006).
As is the case with other benefits, many training programs aimed at
increasing employees' skills are initiated privately by employers and
employees. For example, an employer in Saskatchewan, Canada, reported that
he supports employees' advancement by paying for necessary educational
courses, such as those that prepare employees for required licenses. A
large government employer in the UK, recognizing the challenges faced by
women in a male-dominated field, offers flexible training to make the
training more easily accessible to women--training is available online,
from work or home, as well as through DVDs that can be viewed at one's
convenience. In the Netherlands, according to an employer representative,
most training is developed through agreements in which employers agree to
pay. In Denmark, a director in the Ministry of Education reported that
some companies give employees the right to 2 weeks per year of continuing
education in relevant and publicly funded education.
Although Certain Workplace Policies Are Associated with Increased Participation
in the Labor Force, in General, Effects Are Not Definitive
Research has found that workplace policies such as child care and family
leave encourage women to enter and return to the workforce, while
evaluations of training policies show mixed results. Readily available
child care appears to enable more women to participate in the labor
market, especially when it is subsidized and meets quality standards such
as having a high staff-to-child ratio and a high proportion of certified
staff. Women are also more likely to enter and remain in the workforce if
they have paid family leave, although the length of leave affects their
employment. An extensive review of available research by the European
Commission shows mixed results in whether training helps the unemployed
get jobs. Some training initiatives have shown promise but have not been
formally evaluated. In general, researchers and officials reported that it
is difficult to determine the effects of a policy for a variety of
reasons.
Child Care and Paid Family Leave Are Associated With an Increase in Labor Force
Participation
Readily available child care, especially when it is subsidized and
regulated with quality standards such as a high staff-to-child ratio and a
high proportion of certified staff, appears to increase women's
participation in the labor force by helping them balance work and family
responsibilities, according to research from several cross-national
studies. Additionally, the European Commission reports that women prolong
their time away from work when child care is not subsidized and relatively
expensive. Low-wage workers, especially single parents, who are
predominantly women, are particularly sensitive to the price of child
care, according to a European Commission report. Research from the United
States also shows that highly priced child care can deter mothers from
working, according to a review of the literature. The association between
child care and women's labor force participation is found in several
studies that control for a variety of factors, including individual
countries' cultural norms and experiences. However, the relationship
between early childhood education--which acts as child care for some
parents--and women's labor force participation is uncertain. Because many
unemployed mothers also place their children in subsidized preschool, any
impact that the preschool has on encouraging mothers to work may appear to
be diminished, according to a cross-national study.24
Research shows that paid family leave encourages women's employment, but
is not conclusive as to the ideal length of family leave to encourage
women to return to work. One extensive review of the literature on family
leave found that leave increases the chance that women will return to work
by the end of the year following the birth.25 Another study examining paid
maternity leave of varying lengths of time in several Western European
countries, including Denmark, France, Ireland, and Sweden, concluded that
maternity leave may increase women's employment rate by about 3-4
percent.26 However, if leave is too short, women may quit their job in
order to care for their children, according to a European Commission
report. Another study found that if leave is too lengthy, it may actually
discourage women from returning to work after having a child. One
researcher stated that French mothers with at least two children returned
to the workforce less frequently when they became eligible for 3 years of
family leave. On the contrary, some researchers found that Sweden's
lengthy leave allowed more women to enter and remain in the labor force in
the long run. One review of the literature concluded that leave of up to
about 1 year is positively associated with women's employment, while
another found that after 20 weeks, the effect of leave on employment
begins to deteriorate.
24Florence Jaumotte, "Female Labour Force Participation: Past Trends and
Main Determinants in OECD Countries," OECD Economics Department Working
Papers No. 376 (2003): 19.
25Janet C. Gornick and Marcia K. Meyers, Families That Work: Policies for
Reconciling Parenthood and Employment (New York: Russell Sage Foundation,
2003), 245.
26This may overstate the increase in employment. In some cases, people on
family leave are considered "employed but absent from work," and this may
account for one-fourth to one-half of the increase associated with longer
lengths of leave (9 months or more). Christopher J. Ruhm, "The Economic
Consequences of Parental Leave Mandates: Lessons from Europe," The
Quarterly Journal of Economics, Vol. 113, No.1 (1998): 311-312.
The Effects of Most Workplace Policies and Practices, Including Training, Are
Not Definitive
Evaluations of training programs, where they exist, have shown mixed
results, but many national and local efforts have shown promise. Research
on training program participants from Sweden and Denmark found that
training programs do not appear to positively affect all participants'
employment. While the Danish government's labor market policies seem to
have successfully lowered the overall unemployment rate to around 4
percent by the end of 2006, according to Danish officials, the effect of
specific training programs on participants' employment is difficult to
discern.27 On the other hand, a number of evaluations of French training
programs suggest that these programs help participants secure jobs. New
Zealand's evaluation of two of its training programs, which provide both
remedial and vocational skills to participants, found that the training
had a small effect on the participants' employability.28 According to a
European Commission report, one researcher's review of 70 training program
evaluations, including those in Denmark, France, The Netherlands, Sweden
and the UK, suggested that training programs have a modest likelihood of
making a positive impact on post-program employment rates. However, the
European Commission reports that many studies on individual outcomes are
based upon short-term data, while the effects on participants' employment
may not be evident for 1 to 2 years or more. Some national and local
training initiatives that we reviewed--both those for the employed and
those for the unemployed--have shown promise, although some have not been
subject to an evaluation. For example, an evaluation of the precursor to
the UK's national Train to Gain program found that 8 out of 10
participants believed they had learned new skills, and employers and
participants both felt that the training enabled participants to perform
better at work. However, the evaluation estimated that only 10-15 percent
of the training was new training, while the remaining 85-90 percent of the
training would have occurred without the program. Although a planned
evaluation has not yet been conducted, an individual UK employer reported
that it had trained 43 women for jobs in which they are underrepresented.
Fourteen of these women found employment and 29 are in further training.
27This is partly due to the fact that most studies evaluate all active
labor market programs together, rather than single program types. These
programs include not only skills and qualifications upgrade but also wage
subsidized employment and practical work experience in enterprises. In
addition, all recipients of unemployment benefits in Denmark are required
to participate in active labor market programs if they do not find
employment within a certain time frame, so there is no comparison group
for formal evaluations.
28Roopali Johri et al, Evidence to Date on the Working and Effectiveness
of ALMPs in New Zealand (New Zealand Department of Labor and Ministry of
Social Development, 2004), 15.
Even where evaluations do exist, it is difficult to determine the effects
of any policy for a variety of reasons. Policies affecting female labor
force participation interact with cultural factors, such as a country's
ideology concerning social rights and gender equality, according to a
researcher from Ireland. In some cases, too, new policies interact with
existing ones. For example, a researcher reported that the French
government provides payments to mothers who may choose to stay home with
their children, while also subsidizing child care that encourages mothers
to work. Additionally, changes in the labor market may actually bring
about the enactment of policies, rather than the other way around. For
example, it is difficult to be sure whether the availability of child care
causes women to enter the labor force or if it is an effect of having more
women in the workforce, according to one researcher's review of the
relevant literature.
Further, few evaluations of certain policies and practices have been
conducted in Europe, although this is starting to change, according to the
European Commission. Moreover, some policies were recently developed, and
governments frequently make changes to existing policies, which may make
it difficult to evaluate them. For example, a report by the Canadian
government states that flexible work arrangements are relatively new and
represent an area in which research is needed. In other cases, a policy
simply codified into law a widely used practice. For example, a government
official in the Netherlands reported that it was very common for Dutch
women to choose to work part-time even before legislation passed that
promoted employees' right to reduce their working hours.
While Several Factors Affect Uptake, Employees' Use of Workplace Benefits Can
Have Implications for Employers and Employees
The experiences of the countries we reviewed have shown that
characteristics of policies, such as the level of payment during leave,
can affect whether an employee uses various workplace benefits. For
example, the province of Saskatchewan in Canada provides 12 days of unpaid
leave per year, but low-wage workers cannot always afford to take it.
Similarly, according to a University of Bristol professor, low-income
mothers in the UK disproportionately return to the workforce at the end of
paid maternity leave whereas more affluent mothers tend to return at the
end of unpaid leave. When parental leave can be shared between parents and
the level of payment is low, women tend to take the leave, in part because
their income level is often lower than their husband's. A report from the
European Commission also found that the ability to use leave flexibly,
such as for a few hours each day or over several distinct periods rather
than all at once, can also increase parents' take-up rates for leave, as
parents are able to care for their children and stay in the labor force at
the same time.
Employer views and employee perceptions can also directly affect an
employee's use of workplace benefits. Researchers in Canada, for example,
found that the ability to arrange a schedule in advance and interrupt it
if needed is very important to employees, but that this ability depends on
how willing their supervisor is to be flexible. In addition, a
cross-national study from the Organisation for Economic Co-Operation and
Development, which included the countries we reviewed, found that many
employers tend to view training for the low-skilled as a cost, rather than
an investment, and devote substantially more resources to their
high-skilled workers, on average. Since employers tend to target their
training to higher skilled and full-time workers, employees who opt to
work part-time may have fewer opportunities for on-the-job training that
could help them advance, according to university researchers in the
Netherlands. An employee's perceptions on training can also affect his or
her uptake of opportunities. Employee representatives from Denmark's
largest trade union confederation said that low-skilled employees are more
likely to have had negative experiences with education and that these
experiences can affect whether they take advantage of workplace training
opportunities to increase their skills.
Employees' use of workplace benefits can create management challenges for
their employers. For example, an employer in Saskatchewan reported that
covering for the work of staff on family leave can be complicated. He said
that although he was able to hire temporary help to cover an employee on
maternity leave, he faced an unexpected staff shortage when the employee
decided toward the end of her leave not to return to work and the
temporary employee had found another job. An official affiliated with the
largest employer association in the Netherlands stated that it can be hard
to organize work processes around employees' work interruptions,
especially during short-term and unplanned leaves.
The use of family leave or part-time work schedules may also have negative
implications for an employee's career. Employers have indicated that they
would prefer to hire an older woman with children than a younger woman who
has yet to have children, according to university researchers in
Denmark.29 In addition, long parental leaves may lead to an actual or
perceived deterioration in women's labor market skills, according to an EU
report, and can have negative effects on future earnings. According to
employee representatives in Canada, in the high-tech sector, where there
are rapid changes in technology, the use of parental leave can be
particularly damaging. In addition, some part-time jobs have no career
advancement opportunities and limited access to other benefits, such as
payment during leave and training.
29According to government officials in Denmark, to counter gender
discrimination, all private sector employers are required to contribute to
a fund that pays for periods of leave on the basis of their number of
employees, regardless of gender.
Concluding Observations
Workplace policies and practices of the countries we studied generally
reflect cooperation among government, employer, and employee
organizations. Many developed countries have implemented policies and
practices that help workers enter and remain in the workforce at different
phases of their working lives. These policies and practices, which have
included family leave and child care, for example, have been adopted
through legislation, negotiated by employee groups, and, at times,
independently initiated by private industry groups or individual
employers.
U.S. government and businesses, recognizing a growing demand for workplace
training and flexibility, also offer benefits and are seeking ways to
address these issues to recruit and retain workers. Potentially increasing
women's labor force participation by further facilitating a balance of
work and family, and improving the skills of low-wage workers throughout
their careers, may be important in helping the United States maintain the
size and productivity of its labor force in the future, given impending
retirements. While other countries have a broader range of workforce
benefits and flexibility and training initiatives, little is known about
the effects of these strategies. Whether the labor force participation
gains and any other positive outcomes from adopting other countries'
policies would be realized in the United States is unknown. Moreover, any
benefits that might come from any initiatives must be weighed against
their associated costs. Nonetheless, investigating particular features of
such policies and practices in some of the developed countries may provide
useful information as all countries address similar issues.
This concludes my statement, Madam Vice-Chairwoman. I would be happy to
respond to any questions that you or other members of the committee may
have.
GAO Contact and Staff Acknowledgments
For future contacts regarding this testimony, I can be reached (202)
512-7215. Key contributors to this testimony were Sigurd Nilsen, Diana
Pietrowiak, Gretta Goodwin, Avani Locke, Stephanie Toby, Seyda Wentworth,
and Charles Willson.
Related GAO Products:
Women and Low-Skilled Workers: Other Countries' Policies and Practices
That May Help These Workers Enter and Remain in the Labor Force.
[25]GAO-07-817 . Washington, D.C.: June 14, 2007.
An Assessment of Dependent Care Needs of Federal Workers Using the Office
of Personnel Management's Survey. [26]GAO-07-437R . Washington, D.C.:
March 30, 2007.
Highlights of a GAO Forum: Engaging and Retaining Older Workers.
[27]GAO-07-438SP . Washington, D.C.: February 2007.
Workforce Investment Act: Employers Found One-Stops Centers Useful in
Hiring Low-Skilled Workers; Performance Information Could Help Gauge
Employer Involvement. [28]GAO-07-167 . Washington, D.C.: December 22,
2006.
Employee Compensation: Employer Spending on Benefits Has Grown Faster than
Wages, Due Largely to Rising Costs for Health Insurance and Retirement
Benefits. [29]GAO-06-285 . Washington, D.C.: February 24, 2006.
Social Security Reform: Other Countries' Experiences Provide Lessons for
the United States. [30]GAO-06-126 . Washington, D.C.: October 21, 2005.
Child Care: Additional Information Is Needed on Working Families Receiving
Subsidies. [31]GAO-05-667 . Washington, D.C.: June 29, 2005.
Workforce Investment Act: Substantial Funds Are Used for Training, but
Little Is Known Nationally about Training Outcomes. [32]GAO-05-650 .
Washington, D.C.: June 29, 2005.
Highlights of a GAO Forum: Workforce Challenges and Opportunities for the
21st Century: Changing Labor Force Dynamics and the Role of Government
Policies. [33]GAO-04-845SP . Washington, D.C.: June 2004.
Women's Earnings: Work Patterns Partially Explain Difference between Men's
And Women's Earnings. [34]GAO-04-35 . Washington, D.C.: October 31, 2003.
Older Workers: Policies of Other Nations to Increase Labor Force
Participation. [35]GAO-03-307 . Washington, D.C.: February 13, 2003.
Older Workers: Demographic Trends Pose Challenges for Employers and
Workers. [36]GAO-02-85 . Washington, D.C.: November 16, 2001.
(130782)
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Highlights of [44]GAO-07-989T , a testimony before the Joint Economic
Committee
June 14, 2007
WOMEN AND LOW-SKILLED WORKERS
Efforts in Other Countries to Help These Workers Enter and Remain in the
Workforce
Increasing retirements and declining fertility rates, among other factors,
could affect the labor force growth in many developed countries. To
maintain the size and productivity of the labor force, many governments
and employers have introduced strategies to keep workers who face greater
challenges in maintaining jobs and incomes, such as women and low-skilled
workers, in the workforce. This testimony discusses our work on (1)
describing the policies and practices implemented in other developed
countries that may help women and low-wage/low-skilled workers enter and
remain in the labor force, (2) examining the change in the targeted
groups' employment following the implementation of the policies and
practices, and (3) identifying the factors that affect employees' use of
workplace benefits and the resulting workplace implications.
The testimony is based on a report we are issuing today ( [45]GAO-07-817
). For that report, we conducted an extensive review of workforce
flexibility and training strategies in a range of developed countries and
site visits to selected countries. Our reviews were limited to materials
available in English. We identified relevant national policies in the
U.S., but did not determine whether other countries' strategies could be
implemented here. The report made no recommendations. The Department of
Labor provided technical comments; the Department of State had no comments
on the draft report.
Governments and employers developed a variety of laws, governmentpolicies,
and formal and informal practices, including periods of leave, flexible
work schedules, child care, and training. Each of the countries we
reviewed provides some form of family leave, such as maternity, paternity,
or parental leave, that attempts to balance the needs of employers and
employees and, often, attempts to help women and low-wage/low-skilled
workers enter and remain in the workforce. In Denmark, employed women with
a work history of at least 120 hours in the 13 weeks prior to the leave
are allowed 18 weeks of paid maternity leave. In addition to family leave
for parents, countries provide other types of leave, and have established
workplace flexibility arrangements for workers. U.S. federal law allows
for unpaid leave under certain circumstances. All of the countries we
reviewed, including the United States, also subsidize child care for some
working parents through a variety of means, such as direct benefits to
parents for child care or tax credits. For example, in Canada, the
government provides direct financial support of $100 a month per child, to
eligible parents for each child under 6. Last, governments and employers
have a range of training and apprenticeship programs to help unemployed
people find jobs and to help those already in the workforce advance in
their careers.
Although research shows that benefits such as parental leave are
associated with increased employment, research on training programs is
mixed. Leave reduces the amount of time that mothers spend out of the
labor force. Cross-national studies show that child care--particularly
when it is subsidized and regulated with quality standards--is positively
related to women's employment. Available research on training in some of
the countries we reviewed shows mixed results in helping the unemployed
get jobs. Some local initiatives have shown promise, but evaluations of
some specific practices have not been conducted. Some country officials
said it is difficult to attribute effects to a specific policy because the
policies are either new or because they codified long-standing practices.
While policies do appear to affect workforce participation, many factors
can affect the uptake of workplace benefits, and employees' use of these
benefits can have implications for employers and employees. For example,
employees' use of workplace benefits can create management challenges for
their employers. Additionally, employees are more likely to take family
leave if they feel that their employer is supportive. However, while a
Canadian province provides 12 days of unpaid leave to deal with
emergencies or sickness, low-wage workers cannot always afford to take it.
Similarly, the uptake of available benefits can also have larger
implications for an employee's career. Some part-time jobs have no career
advancement opportunities and limited access to other benefits. Since
employers tend to target their training to higher-skilled and full-time
workers, employees who opt to work part-time may have fewer opportunities
for on-the-job training that could help them advance, according to
researchers in the Netherlands.
References
Visible links
20. http://www.gao.gov/cgi-bin/getrpt?GAO-07-817
21. http://www.familiesandwork.org/
22. http://www.greatplacetowork.com/
23. http://www.gao.gov/cgi-bin/getrpt?GAO-06-285
24. http://www.gao.gov/cgi-bin/getrpt?GAO-07-167
25. http://www.gao.gov/cgi-bin/getrpt?GAO-07-817
26. http://www.gao.gov/cgi-bin/getrpt?GAO-07-437R
27. http://www.gao.gov/cgi-bin/getrpt?GAO-07-438SP
28. http://www.gao.gov/cgi-bin/getrpt?GAO-07-167
29. http://www.gao.gov/cgi-bin/getrpt?GAO-06-285
30. http://www.gao.gov/cgi-bin/getrpt?GAO-06-126
31. http://www.gao.gov/cgi-bin/getrpt?GAO-05-667
32. http://www.gao.gov/cgi-bin/getrpt?GAO-05-650
33. http://www.gao.gov/cgi-bin/getrpt?GAO-04-845SP
34. http://www.gao.gov/cgi-bin/getrpt?GAO-04-35
35. http://www.gao.gov/cgi-bin/getrpt?GAO-03-307
36. http://www.gao.gov/cgi-bin/getrpt?GAO-02-85
37. http://www.gao.gov/
38. http://www.gao.gov/
39. http://www.gao.gov/fraudnet/fraudnet.htm
40. mailto:[email protected]
41. mailto:[email protected]
42. mailto:[email protected]
43. http://www.gao.gov/cgi-bin/getrpt?GAO-07-989T
44. http://www.gao.gov/cgi-bin/getrpt?GAO-07-989T
45. http://www.gao.gov/cgi-bin/getrpt?GAO-07-817
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