The Year 2000 International Research
Conference on Social Security
Helsinki, 25-27 September 2000
“Social security in the global village”
Lone parenthood in the 1990s:
New challenges, new responses?
Jonathan BRADSHAW, Lars Inge TERUM & Anne SKEVIK
Professor of Social Policy, University of York, United Kingdom
Professor and Head of the Centre for the Study of Professions, Oslo University College,
Norway
Research Fellow, NOVA, Norway
I NTERNATIONAL S O C I A L S ECURITY ASSOCIATION ( I S S A )
RESEARCH PROGRAMME
CONFERENCE HOSTS: FINNISH ISSA MEMBER ORGANIZATIONS
SOCIAL POLICY RESEARCH UNIT
ISSA CONFERENCE
The Year 2000 International Research Conference on Social Security
Helsinki, 25-27 September 2000
SOCIAL SECURITY IN THE GLOBAL VILLAGE
LONE PARENTHOOD IN THE 1990s:
NEW CHALLENGES, NEW RESPONSES?
Jonathan Bradshaw1, Lars Inge Terum2 and Anne Skevik 3
Summary
This paper is a comparative study of policies for lone parents in three Nordic countries (Norway,
Sweden and Denmark) and three Anglophone countries (Australia, New Zealand and the United
Kingdom). It reviews the demography of lone parents in these countries over recent decades and trends
in their labour supply. Then drawing on information provided by national informants, it assesses how
the package of policies that might have an impact on in-work and out-of-work income has changed
during the 1990s. It finds that there is little evidence that governments in these countries have responded
to the growth of lone parents with dramatic changes in their social policies, including policies that might
increase incentives for lone parents to participate in the labour market. But it concludes that things may
be changing in the new millennium.
1
Professor of Social Policy, University of York, Heslington, York, UK, YO10 5DD email: [email protected]
2
Professor and Head of the Centre for the Study of Professions, Oslo University College, Wergelandsveien 27,
Oslo 0167 email: [email protected]
3
Research Fellow, NOVA, Munthesgate, 31, Oslo, Norway. email: [email protected]
1
Introduction
Over recent decades, the rates of lone parenthood have increased in most industrialised countries. This
is one of the most striking demographic and social changes in these countries: the separation of sex,
marriage and parenthood has led to lone parenthood rapidly becoming a usual stage in the family life
cycle. Previous studies have indicated that the biggest growth in the rates of lone parenthood have
occurred in the Nordic and in the Anglophone countries, while the growth has been smaller in the
continental/Southern European countries (Bradshaw et al., 1996; Kilkey and Bradshaw, 1999). In this
study, we focus on three Nordic and three Anglophone countries, and ask two questions: first, is the
phenomenon of lone parenthood the same in these countries? Is the rate of growth steeper in some
countries, is there evidence that lone parents in some countries differ systematically from lone parents
in other countries? Second, have policies towards lone parents changed during the 1990s? The
countries included in this study have different political traditions, but they are faced with a similar
demographic challenge. Is there any tendency towards policy convergence - is there one set of social
policy solutions which are being adopted across the countries? In answering this latter question, we
focus both on the generosity of their in-work and out-of-work benefits, and on the relationship
between their disposable incomes in and out of work. What is the relationship between demographic
transformation and policy change?
Analytical framework
The countries included in this study are Norway, Sweden, Denmark, Australia, New Zealand and the
United Kingdom. The three former countries are Nordic and share a strong social-democratic tradition.
The three latter are Anglophone, and have been described as belonging to the ‘liberal’ cluster in social
policy (Esping-Andersen, 1990). The social democratic tradition implies that the Nordic countries have
traditionally had an egalitarian aim in social policy, with a strong emphasis on rights-based benefits at
a relatively high level. Moreover, Sweden and Denmark have been vanguard countries with regards to
female employment, while the Norwegian position in this respect has been more dubious (Leira, 1993).
Sweden and Denmark have not introduced particular benefits for lone parents, but have treated them
mainly as workers and providers. Working lone parents have benefited from an active policy of public
childcare, while non-working lone parents - a minority - have been protected through the general social
assistance schemes. Norway is the only country in the Scandinavian cluster which has a particular
benefit for lone parents, the Transitional Allowance.
The Anglophone/liberal countries in the study have generally had less active policies to include women
in the labour market. This has also affected lone parents, who have received little support if they have
wished to take up paid employment. Some particular benefits for lone parents have existed in these
2
countries, including the One Parent Benefit in the UK (abolished in 1997, see below), the Domestic
Purposes Benefit in New Zealand and the Sole Parent Pension in Australia. The two latter have been
‘social assistance’- like benefits payable to home-based lone parents. In the UK, as in Sweden and
Denmark, non-working lone parents have been protected under the general social assistance scheme.
Although the six countries included here can be grouped in two broad categories, they nevertheless
represent six different policy approaches. Without adapting the reductionist approach of the ‘rational
economic man’- model (see Duncan and Edwards, 1999 for a critique), it is a plausible hypothesis that
the structure of cash benefits and social services may influence the decision to become and remain a
lone parent. Lone parenthood, like pregnancy and the end of a relationship, can be the individual’s
choice – but it can also be something that ‘happens to her’ against her will. An illustration has been
provided by Burns and Scott (1994), who suggest that there is a U-shaped relationship between extramarital birth rates and the status of women. In societies where getting married is the only road to a
certain social standing and some financial security for a woman, prenuptial pregnancy can be ‘rational’
(Burns and Scott, 1994: 86f). Women consent to pre-marital sex in order to keep their boy-friend, only
to be deserted by him as soon as they get pregnant. This leads to high rates of ex-nuptial pregnancy in
societies where women’s position is very weak. But rates will also be high in societies where women
have the opportunity to provide for themselves, and where marriage is no longer seen as the only proof
of ‘respectability’. In such societies, women no longer need men - even conception is possible without
the direct involvement of a man, given the availability of artificial insemination by donor (AID) (op.cit.
p. 91f). Clearly, such different processes will give rise to different ‘types’ of lone parents dominating
in different countries: distraught and impoverished young girls in one society, self-reliant educated
women with stable incomes in another. So is the ‘typical’ lone mother in a country with liberal traditions
significantly different from a ‘typical’ lone mother in a country with social-democratic traditions? This
is the question to be investigated in the first section of this paper. We will look at divorce rates, rates
of birth outside marriage and teenage fertility rates to get an overview of the most important processes
leading to lone parenthood. Then, we will look at the actual proportions of lone parents in the six
countries and some of their key characteristics. We concentrate on characteristics which may influence
their propensity to take up paid employment, since the question of employment or not tends to be the
single most important factor in determining the level of living of lone parents (see below).
In popular discourse, the growth in lone parenthood has been greeted with alarm and presented as
problematic in various ways: a problem of poverty, a problem of fiscal burden, a problem for children,
a problem for women, a problem of personal morality and a social problem. Others, however, have
argued that increasing rates of lone parenthood is an unavoidable feature of a modern, individualised
3
society (Beck and Beck-Gernsheim, 1995), and even that increasing rates of lone parenthood mirror
women’s and children’s liberation from patriarchal family forms (Fox Harding, 1996; Edwards and
Duncan, 1997). The same phenomenon can therefore be met with responses of aggression, concern,
pragmatism and even celebration. This variety of responses illustrates how social facts must be
interpreted in order to be incorporated in the political debate. Different social security systems may
give rise to different ‘forms’ of lone parenthood, as argued above - but different political traditions may
also interpret the increases in lone parenthood differently and create different responses. In the latter
part of this paper, therefore, we will focus on different policy responses as measured by outcomes for
‘model families’ (see below). We will look both at the disposable incomes for lone parents in work on
relatively low pay, and on their disposable income on social assistance. A decrease in both in one
country may indicate that politicians in this country have tried to stem the growth in lone parenthood by
decreasing their incomes whether in employment or not. In such cases, the central policy aim is not to
encourage or discourage lone parents from taking paid employment, but rather to discourage lone
parenthood as such and reinstall the traditional family. Conversely, an increase in incomes for both
working and non-working lone parents will indicate an anti-poverty strategy towards lone parents, a
group generally vulnerable to poverty.
Finally, we will look at the relationship between in-work and out-of-work benefits, which gives some
indication of the work incentive inherent in the cash benefit/ subsidies system. In recent literature about
lone parenthood, the ‘mothers or workers’- dilemma has been particularly highlighted. This is evident
in titles of publications like Breadwinners or Child rearers: the Dilemma for Lone Mothers (OECD,
1992) and Single Mothers in an International Context: Mothers or Workers? (Duncan and
Edwards, 1997). Partly, this interest links in with the discussion in feminist social policy about the male
breadwinner model (Lewis, 1992) and the extent to which welfare states aim at enabling women/
mothers to work outside the home (Kilkey, 2000). Partly, however, it also links in with the new and
growing interest in ‘activation’ policies. When activation is the overall aim, all categories of welfare state
clients are guided towards employment with various ‘push’ and ‘pull’ measures. This also applies to
lone parents on benefit. Increasing proportions of married mothers in employment may have changed
the perceptions of what is ‘normal’ and ‘desirable’ for mothers with young children. At the same time,
growing rates of lone parenthood has made it more difficult to maintain lone parents on benefit over
time. As rates of lone parenthood grow across countries with different political traditions, will we see
a tendency towards policy convergence under the banner of ‘activation’? This is the main question we
investigate in the second part of the paper.
4
Method: The model family approach
In the first section of this paper, we compare the prevalence and characteristics of lone parents. We
focus on differences between countries as well as changes over time. Unless stated otherwise, these
data are taken from mainly national sources and are as comparable as possible. However, there are
gaps in the data for some countries, and in some cases the between country comparisons are not
reliable. Still the within country comparisons are worth making.
Turning to policy in the second section, we make use of the ‘model family’ approach. The model
families matrix is a method which attempts to compare policies between countries on a consistent basis.
It takes a model family at a specified income level, and calculates what taxes that parent would pay and
what benefits it would receive in certain given circumstances. In this analysis the family type we focus
on is a lone parent family with one child aged 2 years and 11 months. We have reduced the
discussion to two circumstances:
1)
the lone parent is working full-time and earning half national average earnings (or the minimum
wage if it is higher), and
2)
she is not employed at all and receiving social assistance in each of the countries.
National informants4 have calculated the net income that a family in such circumstances would receive
in each country. Thus for the employed case they estimate half total average male production earnings
for a given year, deduct any income tax and compulsory social security contributions payable, and add
any cash benefit (means tested or non means tested) that would be received at this income. They then
deduct the net rent that would be payable by this family for a two bedroom rented dwelling at a
specified location in their country. The net rent is defined as the gross rent minus any direct housing
benefits. Finally they are asked to deduct the net costs to the mother of providing full-time formal day
care (of the most prevalent form available in the country). The same calculations have been made in
respect of the social assistance but without any childcare costs5.
The model families matrix method presents the possibility of comparing like with like across different
countries. However, there are a number of weaknesses that have to be acknowledged (see also
Eardley, 1996). First, in order to compare like with like a number of assumptions have to be made -
4
In 1999 Charlotte Koren in Norway; Tommy Ferrarini in Sweden; Per Kampman in Denmark, Tony Eardley in
Australia, Bob Stephens in New Zealand and Tina Davis in the UK.
5
In previous analyses using this method charges for health and education have also been taken into account but
for the purposes of this analysis they have been ignored.
5
about the type of family, their earnings, location housing type, type of childcare and so on. These
assumptions mean that the resultant comparison is not representative, but rather illustrative or symbolic.
Second, it represents the formal picture - what given the rules a lone parent should have rather than
what necessarily she does have. Third, some of the circumstances of the lone parents which are
assumed are not necessarily comparable. Thus, for example the housing is comparable in the number
of bedrooms but not necessarily in other qualities; the childcare is the most prevalent in that country but
not necessarily the same quality between countries. The social assistance assumed for countries where
it varies by municipality, such as in Sweden and Norway, is not necessarily representative of all places.
In addition to the weaknesses inherent in the model family approach, the way data have been collected
for our purposes poses a new set of problems. The data was collected for a variety of different studies:
for 1992 for studies of child benefit packages (Bradshaw et al., 1993; Whiteford and Bradshaw, 1994)
and social assistance (Eardley et al., 1996), for 1994 for a study of lone parents labour supply
(Bradshaw et al., 1996), for 1996 for the European Observatory on National Family Policies (Ditch
et al., 1998). The non-EU countries were not included in the 1996 study, thus data for Norway,
Australia and New Zealand have been collected separately for 1996. For 1999, data from all countries
have been collected exclusively for this study. Over time and between studies, the national informants
have changed in some countries. Moreover, some changes have been made in the assumptions made.
Changing assumptions should not have an effect on the calculations of income tax, social security
benefit and cash benefits, thus we are safe to assume that any changes observed in these are changes
in policy rather than changes in assumptions. However, there is no reliable comparative and up to date
data on average earnings and the national informants estimates may have varied form year to year. Also
there is uncertainty that the assumptions about housing costs and childcare costs have been made
consistently overtime. So in the comparisons below, although we present the results after housing costs
and childcare costs it is important to be aware that some of the changes observed from year to year
may be a function of variations in the matrix assumptions rather than in policies.
The prevalence and characteristics of lone parents
Before turning to the demography of lone parenthood, we will look at some data which may influence
the rates of lone parenthood as well as the characteristics of lone parents. We begin by looking at the
divorce rates in the six countries. In Table 1 it can be seen that the UK and Sweden have the highest
divorce rate among the countries studied. This remained the case throughout the decade. However in
most countries divorce rates appeared to stabilise in the latter part of the 1990’s and later to level off,
making the mid-1990’s the peak years. The exception to this was Australia, where divorce rates
increased over the entire period. By the end of the decade, Norway and Denmark had the lowest rates
6
of the countries included here, while the highest rates was found in the UK.
Table 1:
Divorce rate
199
1991
1992
1993
1994
1995
1996
1997
0
Norway
1.10
1.12
1.12
1.21
1.22
1.17
1.13
Sweden
1.18
1.16
1.27
1.34
1.37
1.37
1.29
1.28
Denmark
1.23
1.14
1.16
1.17
1.23
1.17
1.14
1.14
Australia
1.09
1.16
1.15
1.21
1.20
1.23
1.29
New Zealand
1.23
1.20
1.19
1.20
1.19
1.23
1.27
1.23
UK
n.a.
1.35
1.38
1.43
1.38
1.36
1.39
1.30
In addition to divorce, births outside marriage are the most important events leading to increased rates
of lone parenthood. Trends in the proportion of births outside marriage are presented in Table 2. During
the 1990s the proportion has increased in all the countries, most rapidly in New Zealand and the UK.
However, Sweden had the highest proportion of births outside marriage throughout the decade, and
the rates were generally higher in the Nordic countries. Compared with the other countries included in
this study, Australia still had a relatively low proportion of births outside marriage in the 1990s.
The stabilising or declining divorce rates can be explained by the fall in marriage rates and the increase
in cohabitation experienced in all these countries. Divorce has become a less useful indicator of
relationship breakdown. Similarly, most ‘illegitimate’ births happen to women who live in stable
cohabiting relationships with their child’s father, and is therefore a relatively useless indicator of
developments in lone parenthood. The higher rates of extra-marital birth in the Nordic countries and
in the UK are counterpoised by the high incidence of cohabitation in these countries (cf. Millar and
Warman, 1996, Table 2.1) In the real social world, the traditional indicators on ‘family break-down’
have little meaning given the rise in informal ways of living together. Still, these two tables provide
information about the changing meaning of marriage in these countries. Being married is no longer seen
as a precondition for living one’s life together and even have children, and dissolving a marriage is
clearly no longer a taboo for most people.
7
Table 2:
Births outside marriage (percentages)
1990
Norway
1991
1992
1993
1994
1995
1996
1997
41
43
44
46
48
48
49
54
Sweden
47
48
50
50
52
53
54
Denmark
46
47
47
47
47
47
46
Australia
22
23
24
25
26
27
27
New Zealand
34
36
37
38
39
41
42
42
30
31
32
32
34
36
37
UK
Clearly the most problematic form of extra-marital birth are those happening to teenage mothers.
Teenage pregnancy is seen as a social problem, and causes concerns to an extent extra-marital birth
to older women does not. Table 3 provides data on teenage fertility rates. The table needs to be
interpreted with some caution because there is a mixture of teenage fertility rates (live births per woman
under 20) and the teenage birth rate (proportion of births to women under 20). As is commonly the
case in comparative research, it is impossible to obtain statistics which are fully comparable between
countries. Nevertheless the table shows the trends. All countries have had a reduction in teenage births
over the 1990s. To the extent teenage fertility is seen as a problem, therefore, this problem has
decreased over the decade, but still remarkably high in New Zealand.
Table 3:
Live births to mothers under 20 as a proportion of all live births
1990
1991
1992
1993
1994
1995
1996
1997
Norway
4.3
3.8
3.5
3
2.9
2.8
Sweden
2.2
1.8
1.7
11.4
1.4
1.4
Denmark
2.6
2.5
2.3
2
1.9
1.9
Australia*
2.3
2.2
2.1
2.1
2.1
2.1
2.1
2.1
New Zealand
8.4
8.1
6.2
7.5
7.4
7.6
7.6
7.6
3.3
3.2
3.1
2.9
2.9
3
3.1
UK*
* = fertility rates, others = birth rates. Norway, Sweden and Denmark: data from Nordic Statistical Yearbook 1999,
p. 62
8
The demography of lone parenthood
The demographic developments over the 1990s, as expressed in the three tables above, do not indicate
a clear division between the ‘social-democratic’ and the ‘liberal’ cluster. Divorce rates have stabilised
or declined in all countries except Australia, and teenage fertility is declining across the board. The rates
of birth outside marriage has increased, but this, we assume, is mainly due to the increase in
cohabitation. None of these processes are necessarily linked to lone parenthood, however. Many
divorcing couples do not have children, and many ‘extra-marital’ children are born in stable
relationships. In this section, therefore, we will turn to the proportions and characteristics of the lone
parent population in each country. We begin by showing the development of the proportion of lone
parents in relation to all families with children between 1975 and 1998 (Table 4)6.
In 1975 all the countries had almost the same proportion of lone parents - about ten per cent of all
families with children. However, it can be seen that in all countries the proportion then rose, most
rapidly in New Zealand which by the end of the 1980s had the largest proportion of lone parent
families. Among the other countries, the proportions increased at a relatively similar rate through the
1980’s. In the Nordic countries, however, the proportions more or less stabilised during the 1990’s,
while the proportions continued to increase in the Anglo-phone countries. By the end of the decade,
therefore, the highest proportions were found in Australia, New Zealand and the UK. In respect of
New Zealand it is worth pointing out that 48 per cent of lone mothers are non-white, mainly Maori and
Pacific Islands. The ethnic incidence being 43 per cent for Maori lone mothers, and 18 per cent for
Whites. So the high lone parent rate in New Zealand is associated with non European traditional family
structures.
6
There are problems here in making comparisons. Norway defined cohabiting women with children if the
cohabitee is not the father of a child as a lone parent until 1994. Moreover, there are inconsistencies in the age of
the child and the treatment of lone parents living in multi-unit households.
9
Table 4:
Lone parent families as % of all families with children
197
198
198
199
199
199
199
199
199
199
199
199
5
0
5
0
1
2
3
4
5
6
7
8
Norway*
9
12
15
18
19
20
21
17
18
18
18
Sweden
10
17
16
13
16
18
18
18
18
19
19
19
19
16
17
17
18
19
19
20
22
Denmark
18
Australia
9
13
14
15
16
New
11
13
18
23
25
11
12
13
16
16
20
19
27
Zealand
UK
19
19
21
24
23
24
* In 1994 there was a change in the way Norway defined lone parents with the effect after that date of excluding most
cohabiting couples.
Table 5 provides information on the proportion of lone parents who are men. The highest proportion
is found in Sweden but in all countries fathers are a low proportion of lone parents. Only in Sweden is
there any evidence that the proportion of lone fathers has been increasing in the last decade, something
that may partially be explained by the Swedish practice of registering both parents as lone parents after
divorce (Goodger and Larose, 1998). The main picture across the countries is still that lone parenthood
is a woman’s issue.
Table 5:
Lone fathers as a % lone parent families
1990
Norway
1991
1992
13
1993
1994
13
1995
1996
12
1998
.
11
Sweden
18
Denmark
14
14
13
13
13
13
12
12
12
Australia
13
13
12
12
13
12
13
13
11
New Zealand
UK
19
.
1997
21
16
9
10
23
15
9
9
10
9
9
11
10
The above tables do not indicate dramatic differences between lone parents in the different countries.
The lone parent population constitute between one in four and one in five of all families with children
in all countries, and between 80 and 90 per cent (a little lower in Sweden) are women. The overall
picture is therefore relatively similar. Will this impression of similarity change when we focus on
characteristics of lone parents beside gender, and in particular, their propensity to work and their
poverty rates? In what follows, we shall provide information on these issues in the six countries. The
next two tables provide information on three characteristics of lone parents which may have an influence
on whether or not they are able to enter the labour market - the proportion of young lone parents, the
proportion of lone parents with a young child and the proportion with only one child. First, young lone
mothers will be more likely to lack work experience than older mothers, and may therefore be less
likely to take up paid employment. It can be seen in Table 6 that New Zealand has by far the highest
proportion of young lone parents. Australia was similar to New Zealand at the start of the decade but
there has been a sharp reduction. The proportion in the UK also appears to have fallen over the
decade. The Nordic countries all have fewer young lone mothers than the Anglophone countries. As
with teenage fertility rates (see Table 3), there has been a small decline in every country in the
proportion of young lone mothers.
Table 6:
Proportion of lone mothers under 25
1990
1991
1992
1993
1994
1995
1996
1997
1998
Norway
8
7
5
Sweden
8
7
5
5
5
Denmark
7
6
7
6
6
6
6
6
6
Australia
13
14
12
12
8
10
9
9
7
New
14
5
17
Zealand
UK
21
14
Having a young (pre-school) child in itself tends to make employment difficult. The child will have a
constant need for supervision, and many parents are reluctant to leave pre-school children in the care
of others. Moreover, childcare may be expensive. In Table 7, it is shown that in every country, lone
parents are less likely to have a young child than couples are. This is unsurprising given that lone
parenthood usually occurs after the break-up of a marriage or cohabiting relationship: most children in
lone parent families are born to couples and live their earliest years with both parents. Lone parents in
11
Norway are much less likely than in the other countries to have a young child. However, the differences
between lone parents and couples are not dramatic in any country, thus the table may mirror differences
in family structure more than peculiarities about lone parents. In Norway, New Zealand and the UK,
there is barely any difference between lone parents and couples in this respect. Table 7 also shows that
lone parents in all countries are more likely than couples to have only one child, though the proportion
with only one child is highest in Denmark and the gap in the proportion with one child is bigger in
Denmark than in the other countries.
Table 7:
Proportion with children under 5 or 6 years
Norway (1997)
Sweden (1998)
Denmark* (1998)
Australia (1998)
New Zealand (1996)
UK (1997)
Proportion with
children under 5
or 6 years
26
Lone parents
Couples
27
Lone parents
41
Couples
56
Lone Parents
45
Couples
57
Lone parents
34
Couples
41
Lone parents
44
Couples
45
Lone parents
40
Couples
43
Proportion of lone
parents with one
child
39
10
55
37
60
38
48
34
50
34
50
38
* under 7
The next tables examine the employment rates of lone parents. First in Table 8 we examine changes in
employment rates of lone mothers over time. The data is not available for every country for every year.
However, it can be seen that the employment rates are much higher in the Nordic countries than the
Anglophone countries. Among the Nordic countries the employment rates have remained stable, except
Sweden where they have fallen strongly during the 1990s. The same stability can be seen among the
Anglophone countries, with the exception of New Zealand. Here there is evidence of an increase, albeit
from a very low base. The New Zealand employment rate fell substantially during the 1980s during a
period of economic depression which affected the less skilled most severely. The growth 91-96 is due
12
to economic recovery as well as the start of a change of philosophy to employment as the solution to
poverty relief.
Table 8:
Employment rates (proportion in employment) for lone mothers
1990
1991
1992
1993
1994
1995
1996
1997
1998
Norway
65
64
63
65
66
67
70
70
69
Sweden
87
70
68
Denmark
68
73
Australia
44
New Zealand
27
UK
43
42
43
43
38
40
40
41
41
36
42
41
40
42
45
This picture hides considerable variation between countries in the proportions working full-time and
part-time and in the differences between the employment rates of lone mothers and married mothers.
These differences are explored in Table 9 for the latest available date for which there is data. Lone
mothers are much more likely to be in full-time employment than part-time employment in the Nordic
countries whereas in the Anglophone countries the proportions are muchmore equal. In all the countries
the proportion of lone mothers in employment is lower than married mothers (though this is not true of
all developed countries - see Bradshaw et al., 1996). However, if lone mothers are in employment,
in all the countries a higher proportion of those employed than married mothers work full-time.
Table 9:
Proportion of lone mothers and married mothers in employment
Lone mothers
Married mothers
Full-time
Part-time
Total
Full-time
Part-time
Total
Norway (1991)
44
17
61*
40
37
77
Sweden (1998)
43
25
68
41
31
72
Denmark (1995)
57
16
73
63
26
89
Australia (1996)
22
22
44*
26
34
60
New Zealand (1996)
20
16
36
34
31
65
UK (1997)
21
24
45
27
40
67
DK: part-time = less than 36 h/week full-time = 36 h/week or more
* These are slightly different from the figures given in Table 8 because of the different sources of the
data.
13
Whether or not employment is seen as an advantage for lone mothers varies between countries and
over time. With the recent emphasis on ‘activation’ in social policy, however, paid employment is
usually presented as the preferable option both for lone mothers themselves and for society at large.
One important argument is that paid employment tends to keep lone parents out of poverty. In Table
10, we have combined data from different studies to present a picture of the associations between lone
parenthood, employment and poverty. Fully comparable data from New Zealand is not available. The
first part of the table presents some of the results of a recent analysis by the OECD based on national
data sets. It shows that child poverty rates in lone parent families varies between countries, with the
UK having by far the highest rates among these countries. It also shows that the poverty rates vary
according to whether the lone parent is employed. In all countries child poverty is lower if the lone
parent is employed and they are remarkably low in Norway and Sweden. Australia is interesting in that
its employed poverty rates are much more like the Nordic countries than the UK. The second part of
the table is taken from a recent analysis of LIS data and it gives the poverty rates for children in one
and two parent households. Here Sweden is the outlier with lone parent poverty rates only slightly
higher than couple poverty rates. New Zealand appears to lie between the other Anglophone countries
and the nordic countries in terms of poverty incidence - probably the result of a high benefit replacement
rate rather than employment rates.
Table 10: Poverty rates for lone parents
Norway
Sweden
Denmark
Australia
New
UK
Zealand*
OECD (1999):Poverty
1995
1995
1994
1994
1995
30
24
34
42
69
5
4
10
9
26
1995
1992
1992
1994
1995
10
5
11
38
rates for children
Lone parents not
employed
Lone parents employed
LIS - Bradbury and
Jantii (1999: Poverty
rates for children)
20*
Lone parent
Two parent
3
4
6
15
40
5*
18
* These data are from Stephens et al (2000) and use the same poverty threshold but a different
equivalence scale.
14
In summing up the results so far, it can be seen that the traditional family is losing ground in all the
countries included here. All the countries have relatively high divorce rates, and high rates of birth
outside marriage. The increasing prevalence of cohabitation - for which it is extremely difficult to find
reliable comparative information - muddles our data, but it can still be concluded that the importance
of marriage as a framework for family life is decreasing. Nevertheless the teen fertilityrate is decreasing.
We can therefore not conclude, as some do, that the emerging family pattern is mainly cause by
‘irresponsible’ young girls: the women who have children outside marriage are rarely teenagers. This
is also shown in table 6: the vast majority of lone parents in all the countries included are over 25. In
fact, in most countries there are more lone fathers than there are lone parents under 25. The stereotype
of ‘lone parents’ as young girls does therefore not hold true in any of the countries studied here. Also,
lone parents are less likely than couples to have young children, and they are more likely to have only
one child. All these conclusions hold true throughout the 1990’s, thus there appears to have been no
remarkable changes over the decade in the demography of lone parenthood.
The social situation of lone parents varies more between countries than their demographic
characteristics, both over time and between countries. Early in the 1990’s, Sweden stood out withvery
high employment rates for lone parents - 87 per cent. During the decade, however, employment rates
in Sweden fell to 68 per cent. At the same time, employment rates for lone parents in Norway increased
from 65 to 69 per cent. Thus by the end of the 1990’s, employment rates for lone parents in Norway
and Sweden were similar. In Australia and the UK, rates have gone up and down, but they remain at
a level about 40 per cent. Although we lack data for Denmark and New Zealand over time, there
seems to be a convergence of outcomes within the ‘regimes’ in this respect: employment rates in the
Nordic countries are around 70 per cent, while they fluctuate around 40 per cent in the Anglophone
countries. These differences are even more clear when it comes to poverty rates. Although there are
differences between the Nordic countries, the differences between Norway, Sweden and Denmark on
the one hand and Australia and the United Kingdom on the other are dramatic. The LIS results quoted
here indicate poverty levels among lone parents in the latter countries about 4-5 times higher than in the
Nordic countries. If non-working lone parents in the Nordic countries are singled out, it becomes clear
that their poverty rates are far higher than what appears to be the average among all lone parents.
Poverty rates among non-working lone parents in Norway and Denmark are around 30 per cent, while
they are 42 per cent in Australia and almost 70 per cent in the UK. We can therefore conclude in this
section that although policy regimes appear to have only a modest effect, if any at all, on the formation
on lone parent families, they strongly influence the lone parent’s situation. This applies both to the
(constrained) choices lone parents make withregards to labour market participation, and to the financial
circumstances lone parents find themselves in.
15
Policy levers
If a government wishes to alter the structure of financial incentives facing lone parents and thereby
encourage them to seek employment it can chose to do so using a variety of different financial levers7.
Broadly these levers can be divided into two groups: (1) those that have an impact by increasing the
net disposable income of lone parents in employment, and (2) those that have an impact by reducing
the net disposable income of lone parents receiving out of work benefits.
Increasing lone parent’s income in employment may be achieved by:
•
action on earnings, for example the introduction of a statutory minimum wage (or a contractual
minimum wage).
•
action on direct taxation, for example raising the tax threshold or reducing the rate of social
security contributions.
•
more generous in work benefits for lone parents - income related or non income related child
benefits
•
more generous housing benefits or subsidies
•
better direct or indirect subsidies for childcare
•
higher child support payments and child support schemes that are guaranteed.
Reducing out of work benefits for lone parents can be achieved by:
•
Cuts in out of work benefits
•
Taxing out of work benefits
•
Uprating benefits by less than the rate of wage inflation
•
Changing the eligibility rules - for example expecting lone parents to seek work when their
children are younger.
Though examples of these policies exist we do not know whether they were originally introduced with
the explicit intention of influencing the financial incentives of lone parents to seek employment.
Nevertheless, whether the intention was implicit, explicit, motivated by completely other considerations
or merely the residue of accumulated historical precedent, the policies have the effect of increasing
financial incentives to employed work. What is interesting here, therefore, is whether during the period
covered by this study we can observe any of our countries using these mechanisms to encourage lone
7
Of course financial incentives are not the only or necessarily the most important factors affecting lone parents
labour supply. Bradshaw et al. (1996) considered the impact of other factors including the demographic
characteristics of the lone parents particularly their age and the age of their children; their level of education and
training; cultural expectations about the roles of women as mothers or workers; the quality of childcare; the state
of labour demand; and benefit rules themselves.
16
parent labour supply. We approach this question by using the model family matrix analysis over time
to observe whether there has been any significant changes in the net in work incomes of lone parents,
their incomes on social assistance and the ratio between the two - the replacement ratio.
In work incomes
We start by comparing the denominator of the replacement rates - the in work incomes of lone parents
- (expressed as a proportion of average earnings) in Table 11. Column 1 in the table shows the net
disposable income of a lone parent with one pre-school child after taxes and benefits. Columns 2 and
3 show how this disposable income decreases after paying for housing (col. 2) and child-care (col. 3),
while column 4 shows the ‘end result’. Columns 1 and 4 are the ones showing the results we are
interested in, while the two intermediate columns explain the difference between the ‘before’ and ‘after’
estimates.
The table shows that there is considerable variation between countries at a point in time, over time and
by whether the comparison is made before or after housing costs and childcare costs. After taxes and
benefits, lone parents in Norway have the highest net disposable income as a proportion of average
earnings. This has remained the case over the time of the analysis. It is also the case after housing costs
and childcare costs are taken into account, even though Norway has the highest housing costs of all the
countries studied. The relative positions of the other countries varies over time and according the
whether the comparison is made before or after childcare costs. If the comparison is made after housing
and child-care costs, Australia was similar to Norway early in the decade. However in Australia the net
disposable incomes have decreased from 62 to 53 per cent of average national earnings, while housing
costs have increased somewhat. Taken together, this results in lone parents in Australia having had the
strongest decrease in their disposable income after housing and childcare relative to the average wage
earner in their country. The only country which has had a similar, although less dramatic, fall in
disposable income of working lone parents is Sweden. Costs of housing and childcare have been stable
in Sweden, so this decrease is explained only by the decrease in their net disposable incomes after taxes
and benefits. The United Kingdom stands out with very high childcare costs, resulting in the lowest
disposable incomes for lone parents after costs early in the decade. This however changed somewhat
after 1996 with the introduction of a childcare disregard in Family Credit.
The changes in relative income over time are difficult to interpret, since there is no consistent pattern.
In Denmark and New Zealand it has been relatively stable. In Norway and the UK it has gone up and
down, while in Sweden and Australia it has gone down. The picture is somewhat different if the
comparison is made before or after housing and childcare costs. No country stands out as having
17
become clearly more generous towards working lone parents, although childcare subsidies have
resulted in a small increase in the UK. However, Sweden and Australia appear to have become less
generous towards lone parents in employment. We can of course not read from the table whether or
not this is a conscious policy - but if it is, it seems unlikely that the aim should be to discourage lone
parents from working outside the home. Rather, it could be seen as an indication of a more punitive
approach towards lone parents as such. Similarly, the high disposable incomes in Norway may indicate
an effort to maintain the standard of living for lone parents, or it may reveal a lasting commitment to
encourage paid employment. More indications of policy directions can be found by looking at lone
parents receiving social assistance, to which we now turn.
The social assistance package
Table 12 shows the disposable incomes for lone parents on social assistance (again as a proportion of
average earnings in each year). We have assumed that recipients of social assistance are not in
employment and therefore have no childcare expenses. However they still need a place to live, thus their
disposable incomes are estimated before and after housing costs. Again Norway has by far the most
generous social assistance regime for lone parents. In contrast the UK has consistently the lowest levels
before housing costs, lagging clearly behind all the other countries in the study. However recipients of
social assistance in the UK are not paying for housing, thus the relative position of the country improves
after the deduction of housing costs in other countries. After housing costs, both Australia and New
Zealand have lower levels of social assistance after 1996.
Looking at disposable incomes before housing costs, Norway and the UK were outliers at the
beginning of the decade: Norway clearly on top, UK at the bottom. Denmark (1994) also stood out
with rates clearly lower than Norway, but also clearly higher than the rest. This picture changes in 1996,
when Sweden leapt to Denmark’s level. Given that Swedish recipients of social assistance - like their
British counterparts - do not pay for housing, the Swedish policy change is even more clear if we look
at incomes after housing. After housing in 1996, the disposable income of Swedish lone parents was
similar to that of Norwegian lone parents (measured as a proportion of average national incomes). This
changed in 1999 only because Norway increased rates even more, Sweden maintained the high level.
Meanwhile, the post-housing disposable incomes of lone parents in social assistance fell in New
Zealand, the UK and, most dramatically, in Australia. As a result, the ‘welfare regimes’ stand out very
clearly in the post-housing column in Table 12. In the Nordic countries, net disposable incomes varies
between 33 and 46 per cent of national average earnings in 1999. In the Anglophone countries, they
vary between 13 and 22 per cent. The same picture emerges, although less clearly, if we look at rates
before housing.
18
Lower incomes on social assistance may become an incentive to taking up paid employment. It can also
be part of a more punitive policy towards lone parents, or towards benefit recipients generally, or part
of an attempt to ‘roll back the state’. In the next section, we look at the relationship between in-work
and out-of-work incomes. This will give an indication of the changing work incentives over the decade.
Replacement rates
The final table based on the matrix analysis attempts to represent the relationship between in work
incomes and out of work incomes by presenting replacement rates. These are calculated as the social
assistance entitlement as a proportion of the net disposable income of the lone parent working for half
average earnings. It is therefore a notional or representative replacement rate and the actual replacement
rate is likely to vary considerably around this rate depending on the earnings of the lone parent. Low
replacement rates indicates a strong financial incentive to replace social assistance with income from
earnings. It can be observed in Table 13 that replacement rates have varied very considerably within
and between countries over time. In Norway, the rates decreased until 1996, then leapt in 1999. In
Denmark there has been a small decline, while the replacement rated increased strongly in Sweden.
Before housing and childcare, both Sweden and Denmark had higher replacement rates than Norway
by the end of the decade. New Zealand had the highest replacement rate early in the decade, second
only to Denmark in 1994. Replacement rates however fell in New Zealand over the decade (partly due
to the introduction of an in-work benefit in 1997), still they remained the highest among the Anglophone
countries. There was also a fall in the UK, while there was a small increase in Australia. Before housing
and childcare costs in Denmark, New Zealand and the UK there is clear evidence of a decline in
replacement rates - in other words, that financial incentives for this lone parent to enter/stay in
employment have increased. In Norway, Sweden and Australia replacement rates have fluctuated but
in each case they are higher in 1999 than 1992 indicating the financial incentives to leave employment
or stay on social assistance has increased.
However, working lone parents are going to need affordable child-care. Replacement rates increase
dramatically in many countries if housing and child-care costs are taken into account, as is evident in
Table 14. Measured in this way, replacement rates have fallen in Norway, Denmark, Australia and the
UK over the decade. In New Zealand they have remained stable while in Sweden they have increased.
In 1996 and 1999, Sweden and New Zealand are the only countries which have replacement rates at
100 and higher. Australia has by far the lowest replacement rate.
So far the discussion has concentrated on broad conclusions from the analysis between countries. But
as we have seen there have been changes in the level of living of lone parents relative to average
19
earnings over time in each country and this has altered the position of a country relative to another. We
therefore, in the next section, seek to go into the “black box” of policy and understand some of these
changes.
Inside the black box
Unfortunately, the 1992 matrix data for Denmark is not usable because the assumptions (on average
earnings, social assistance and housing costs) were not consistent with later years. During the years for
which we have data, replacement rates in Denmark have fallen slightly. This is the consequence of out
of work benefits losing their value in relation to average earnings (they are uprated in line with blue collar
earnings) whereas income from employment after housing and childcare costs has maintained its value.
Measured as a proportion of average earnings, therefore, paid employment paid off better by the end
of the 1990s than it did at the beginning of the decade. However the changes in Denmark are very small.
Denmark has never had a particular policy towards lone parents, but have treated them mainly as
workers. The changes that have happened to Danish family policy have not been directed at lone
parents, nor does our data indicate that any such changes have altered the conditions for lone parents
during the 1990s.
During much of the period covered by this analysis, New Zealand was governed by a radical
Conservative Government (National) following free market liberal policies. This included a substantial
effort to ‘roll back’ the welfare state by cutting public expenditure. In 1991, there was a cut in the
Domestic Purposes Benefit, and the universal child benefit was abolished. This however happened
before the starting point for our analysis. Judging from the matrix results, there were few notable changes
in New Zealand between 1992 and 1999. It looks as though there was a small reduction in replacement
rates between 1992 and 1994 but this is not reliable because the assumptions for housing costs used
in 1992 were higher than those used in 1994. Anyway by 1996 replacement rates after child care costs
had reverted to the level they had been in 1992. The reduction in replacement rates over the period
appears to be the result of the fact that the Domestic Purposes Benefit (DPB) was being uprated in line
with the Consumer Price Index rather than earnings - earnings rose by 12 per cent and social assistance
by 8.5 per cent between 1992 and 1996. But in work incomes were also reduced by an increase in
childcare costs, therefore the change in replacement rates is not as dramatic as it could have been.
From July 1996 a number of changes were made in the taxation system affecting families with children:
the Guaranteed Minimum Family Income (GMFI) and Family Support Tax Credit (FSTC) were
increased (thanks partly to evidence that they were comparatively low (Stephens and Bradshaw, 1995).
An Independent Family Tax Credit (IFTC) were introduced in 1997. The gmfi results in a reduction of
tax liability for some low-earning employees, but half average earnings is above the level of earnings at
20
which it operates. Our model family is therefore not affected. Beneficiaries receive FSTC as a separate
payment, while IFTC is only available to working parents not in receipt of benefit. From July 1 1998
IFTC was doubled, and followed by further tax reductions (see Goodger and Larose, 1998 for a further
discussion). This represented a conscious attempt to increase work incentives for lone parents, and
probably explains the lower replacement rate for 1999 seen in table 13. Probably more important was
a review of the DPB which has significantly altered the philosophy and entitlement conditions. The policy
is now to encourage employment with work testing for those with a child over 6, more generous
assistance with childcare, an increased free-zone before benefit is abated, as well as IFTC. The result
has been a fall in the number on DPB (from 114,799 in 1997 to 109,879 in 1999 and an increased
number resorting to part-time employment (from 16 per cent in 1995 to 22 per cent in 1999).
The period 1992-1997 covered by the matrix analysis more or less coincides with the last parliament
controlled by the Conservative Party in the United Kingdom. During that period there was increasing
public attention paid to lone parents and plans were made to cut out-of- work benefits for lone parents
(by the abolition of the lone parent premium in Income Support) and to reduce their in-work income
by the abolition of One Parent Benefit8. These measures were however only implemented by the Labour
Government which took office in May 1997. Despite the aggressive rhetoric, therefore, during the
Conservative period there was only one major change affecting the in-work income of lone parents.
From October 1994 there was a disregard of childcare costs introduced into the income tested child
benefit scheme (Family Credit). Under the scheme up to £60 per week for one child or £100 per week
for more than one child was disregarded from income in assessing eligibility for Family Credit. The
scheme was less useful than it might appear - partly because the childcare had to be formal childcare
in a registered provider, and partly because it only benefited those families receiving less than the
maximum Family Credit. By August 1998 only about 37,000 families were benefiting from the scheme.
One of them however happened to be our lone parent, and this explains the decline in replacement rates
for the UK in 1996. Two other changes had an effect on replacement rates during this period. Between
1992 and 1994 families on Income Support were no longer expected to pay a proportion of their local
taxes (which explains the small increase in out-of-work income) and, more importantly, out- of- work
benefits (Income Support) was up rated by less than the increase in average earnings (broadly in line
with prices) and thus the incomes of lone parents on Income Support declined relative to families in
employment.
8
A rather anomalous proposal because it reduced work incentives but the objective was to abolish the advantage
that lone parents had over couples in the Child Benefit scheme.
21
However, since the Labour Government was elected in May 1997 there have been a spate of policy
changes and proposals which when they come on stream will eventually transform the replacement rates
for lone parents. On the out-of-work benefits side the abolition of the lone parents premium in Income
Support already mentioned has been partially offset by an above inflation rate increase in the Income
Support scale rate for a child under 11. On the in-work income side Child Benefit and Family Credit
have been increased above the rate of inflation, the bottom rate of income tax has been reduced, and
a minimum wage of £3.60 per hour has been introduced from April 1999. All these changes are
reflected in the results for 1999. In October 1999 (beyond the date of this analysis Working Families
Tax Credit and Child Care Tax Credit began to operate which between them will transform the in-work
incomes of lone parents and greatly reduce replacement rates. Indeed there has been a sea change in
policy with a raft of measures designed to encourage lone parents to take up paid employment,
included in the New Deal for lone parents.
Judging from the analysis above, Australia is the country which has had the most punitive approach to
lone parents during the 1990s. Australia is the only country where the income of our model family has
fallen both when receiving social assistance and when in low-paid employment. In particular, the fall in
disposable income for the family on benefit after housing costs is dramatic - although this result should
be interpreted with caution as the housing cost assumption changed after 1994. Australia is one of the
countries with a specific categorical benefit for lone parents, the sole parent pension, which was
introduced in 1989. Also in 1989, the JET-program was introduced (Jobs, Education and Training),
with the aim of helping lone parents take up employment. So as was the case for New Zealand, the
important policy changes happened before 1992. However, there was a new round of changes by the
late 1990s. In 1998, Parenting Payment replaced the sole parent pension. This did not lead to an
immediate change in rates, although the rules for co-ordination of benefits and assets were changed.
Beyond the end of the study in 2000 things may be changing. Thus the interim report of the Reference
Group on Welfare Reform was released and it recommends (in fairly vague terms) that most sole parent
beneficiaries should become subject to the ‘mutual obligation’ regime which currently applies to other
unemployed people - so that most would have to demonstrate some kind of ‘participation’ either
through job search, training or in some other unspecified way.
Sweden is perhaps the most puzzling of our cases. Traditionally, the country has been strongly
committed to helping lone parents to provide for themselves. Sweden ran an ‘activation’ policy before
the concept was even known. In the 1990s, however, when ‘activation’ became an international
buzzword, Swedish policies have had the directly opposite effect. The incomes of working lone parents
have decreased, the incomes of lone parents on social assistance have increased, and replacement rates
22
have skyrocketed during the latter half of the 1990s. After housing and child-care costs are taken into
account, Sweden had by far the highest replacement rates of all the countries in 1996 and 1999.
During the 1990s, the Swedish economy was in recession. The slump began around 1992, and began
to recover around 1997. Unemployment rates increased sharply in the period - from around one per
cent in 1990 to more than eight per cent in 1993. There is evidence that lone parents were hit harder
than other groups in this period, and since the recovery the unemployment rates for lone parents have
fallen at a slower pace than is the case for other groups. The successful policy of providing for lone
parents by helping them provide for themselves therefore began to crumble during the decade. In 1991,
the Swedish tax system was changed. The overall aim of the reform was to decrease progressivity,
broaden the tax base and lower the tax level. As part of this reform, the tax reduction for lone parents
was abolished. As a compensation, a temporary allowance was paid to lone parents between 1991 and
1993. From 1994 onwards, this allowance was incorporated into the housing allowance scheme. This
restructuring explains why the tax rate increased as a percentage of earnings from 1992 to 1994, from
23 to 29 per cent, and therefore why the disposable income from work fell as a proportion of earnings
between 1992 and 1996. A further contribution towards an explanation of this phenomenon is the
development of the child benefit. An increase in the child benefit was planned in 1992, but was rejected
when the centre/ right government launched its ‘crisis package’. It was further reduced by 15 per cent
in 1996. The freezing of the benefit and the later reduction led to the fall in the relative value of nonmeans-tested benefits - from 28 per cent in 1992 to 20 per cent in 1996. The fall in disposable incomes
as a proportion of earnings for working (low-paid) lone parents is therefore largely explained by tax
reforms and reductions in non-means-tested benefits. Also, there was a small increase in child-care fees.
These are determined at the municipal level, but local authorities also needed to increase their incomes
during the early phases of the slump in the Swedish economy.
Lone parents in Norway have the highest incomes of all the countries in the study, whether they are in
employment or on benefit. This has remained the case throughout the 1990s. However, the rates have
gone up and down. The U-shaped form of the replacement rates (before and after housing and childcare costs) is particularly striking. The decrease from 1992 to 1994 is mainly explained by a decrease
in child-care costs. These are determined at the local level in Norway, and our data is therefore
vulnerable to changing assumptions. There were no changes in child-care subsidies at the national level
in this period.
The changes between 1996 and 1999 are more certain to have an explanation rooted in actual policies.
The Labour Government began drafting a new policy for lone parents in the early 1990s, with a strong
23
emphasis on ‘activation’. The reforms were fully carried through from 1 January 1998. The overall aim
of this reform was, first, to tighten up the eligibility criteria to achieve better targeting, second, to increase
the benefits for the eligible group. In effect, a clear distinction was made between those parents who
were expected to provide for themselves, and those who were ‘expected’ to remain in the home and
receive benefits. In effect, it can be seen that replacement rates before housing costs for lone parents
with a child aged 2 years and 11 months increased from 67 in 1996 to 84 in 1999 - in other words, the
financial incentive to work outside the home decreased notably for lone parents with young children. If
we had included a model family with a child older than 3, however, we would have seen the opposite
effect. What happened on 1 January 1998 was that the eligibility criteria for transitional allowance were
substantially altered. Previously transitional allowance had been available to all non-employed or lowpaid lone parents with children younger than ten. After the reform, this age limit was reduced from ten
to eight. More importantly, it would only be payable for a maximum of three years, extended to five
years if the parent was undertaking education. After the youngest child had turned three, transitional
allowance would only be paid if the parent was in employment, was undertaking education or training,
or was actively seeking employment. For those who were still entitled, the allowance was increased by
about NK 7000 per year. At the same time, the child-care benefit was changed from a fixed amount
to 70 per cent of documented child-care costs up to a maximum. From 1 January 1998, lone parents
in receipt of transitional allowance have also been entitled to an extra addition in child benefit for young
(under 3) children.
The Labour government was voted out of office in 1997, and a centre-left coalition government took
over. One of the new governments most important commitments was to introduce a home-care
allowance for families with young children. This was introduced for one year olds from 1st August 1998,
and for two year olds from 1 January 1999. The full allowance is NK 27,156 per year, and is paid to
families who are not using state-sponsored nurseries. For children in part-time care in state sponsored
nurseries, the rate is reduced proportionally: half day in day-care gives half home care allowance. This
allowance has helped to increase the incomes of lone parents with children under 3 on social assistance,
as is evident in Table 13.
Conclusions
It has not been our ambition in this paper to develop a detailed understanding of national policies
towards lone parents - the purpose of the last section is merely to gain some insight of what policy
initiatives may have produced the results shown in Tables 11 to 13. Rather, we have attempted to
discover whether or not there have been any common trends in the demography of lone parenthood and
in policies towards this group in six countries with different policy traditions.
24
Regarding demographic developments, the similarities between the countries are more striking than the
differences. All the countries included have high divorce rates, but the increase has stabilised during the
decade (though this may be the consequence of cohabitation breakdown replacing divorce). The same
is true for births outside marriage, although these rates are on average higher in the Nordic countries
than in the Anglophone countries (but again this may be influenced by high cohabitation rates in the
Nordic countries). Lone parents compose about one in five of all families with children in Norway,
Sweden, Denmark and Australia, and about one in four in New Zealand and Great Britain, and the
majority in all countries are women. In all countries, lone parents tend to have fewer and older children
than couples. Differences between clusters of countries are found when we look at the age of lone
parents, and their employment and poverty rates: the proportions of young (under 25) lone parents are
higher in the Anglophone countries, and their employment rates are much lower than is the case for the
Nordic countries. Lone parents in the Anglophone countries are also far more likely to work part-time.
Also, their poverty rates tend to be higher - although we are lacking some data for New Zealand and
there may be an exception for working lone parents in Australia.
With this background, we cannot rule out the hypothesis that different welfare states give rise to different
forms of lone parenthood. Although our data do not allow us to draw strong conclusions, there seems
to be an association between the high incidence of young lone parenthood and low employment rates.
In particular, the UK and New Zealand stand out as type-cases with these characteristics. We have
already pointed out that becoming a lone parent early in life makes employment more difficult than when
one becomes a lone parent at a later stage. It is easier to return to an already established career as a
lone parent, than to begin one’s first career with a young child in tow. However, the association may
be more complex - there may be processes at work similar to those proposed by Burns and Scott
(1994, see above). In societies where female employment rates are low, having a child early while in
an unstable relationship may be one way of establishing an adult role for young women with limited
employment prospects. Being a mother in a society where it is common for mothers to stay at home
creates an alternative to paid employment. Young women in societies where mothers normally work will
think of the roles as mothers and workers as two sides of the same coin, and will be more reluctant to
have children until they feel financially secure. This has little to do with the financial incentives inherent
in more or less generous benefits, rather, it stems from how young women evaluate their opportunities
and how they imagine their future. If young lone motherhood is seen as something to be avoided,
therefore, providing education and employment opportunities for young women may be the best
strategy.
We have not been able to establish any association between demographic developments and policy
25
changes as measured by the model family approach. Neither have we found any common trends
between the countries towards retrenchment, expansion (anti-poverty strategies) or activation. The
patterns of change vary widely according to which measure of change we focus on, and whether or not
we include estimates of child-care and housing costs. The disposable incomes of lone parents on social
assistance tend to be higher in the Nordic countries, but there is wide variation within the clusters. For
replacement rates, there are no similar trends. These have gone up and down, and the overall effect is
highly dependent on how we treat housing and child-care costs. The overall impression is that policies
towards lone parents in most countries during the 1990s were lacking a clear direction. Conscious
attempts to create ‘activation’ measures - which have been stated as an aim in several countries - tend
to be contradicted by side-effects of other policy measures. The UK is the only country which has
managed to decrease strongly their replacement rates after housing and child-care - this was the
intended effect of the 1994 child-care bonus in the Family Credit scheme, and it appears to have
worked for those who benefit from it. In New Zealand, increased childcare costs appear to have
neutralised any ‘activating’ effect of the 1996 taxation changes. Norway introduced its division between
lone parents as ‘carers’ and ‘workers’ in 1998, where the main dividing line was the child’s third
birthday. In our matrix analysis, where the model family has a child under three, this is shown as a higher
replacement rate. In Denmark and Australia, replacement rates have remained relatively stable. There
is a strong decrease in Australia after housing costs are taken into account, but unfortunately we can not
rule out that these results are not due to changed assumptions. As for Sweden, it appears that a lone
tradition of ‘activation’ policies was replaced by an un-coordinated set of anti-poverty measures when
the country was faced with a severe economic crisis. Of all the countries included in this study, Sweden
may be interesting to follow to see if it reverses the policy changes it made in the 1990s and the UK
to see whether the measures it is introducing will have an effect on lone parent’s labour supply.
26
Table 11:
The incomes of lone parents in employment at half national average male production worker earnings as % average earnings
Net disposable income after
NDI after housing costs
NDI after childcare costs
NDI after housing and childcare
taxes and benefits
Norway
costs
1992
1994
1996
1999
1992
1994
1996
1999
1992
1994
1996
1999
1992
1994
1996
1999
78
77
77
77
58
54
55
51
66
71
72
74
47
48
50
47
46
44
45
37
37
37
42
41
43
33
33
35
Denmark
Sweden
53
48
44
44
39
34
31
31
50
44
40
40
37
30
27
28
Australia
62
62
59
53
52
51
41
39
57
59
54
47
46
48
36
28
New Zealand
46
47
47
48
30
34
31
33
38
36
36
36
22
23
20
21
UK
54
56
65
54
43
43
52
43
28
28
42
35
17
15
29
23
27
Table 12:
The income of lone parents with one pre school child not in employment and
receiving social assistance as a proportion of total average male production
workers earnings.
Net disposable income before
NDI after housing costs
housing costs
Norway
1992
1994
1996
1999
1992
1994
1996
1999
56
53
52
65
43
41
40
42
39
40
35
32
46
33
Denmark
Sweden
34
33
40
39
34
33
40
Australia
35
35
33
32
30
29
15
New Zealand
36
35
35
33
28
23
21
21
UK
25
27
23
22
25
27
23
22
28
39
13
Table 13:
Replacement rates (net income on social assistance as % net income in employment)
Net disposable income after
NDI after housing costs
NDI after housing and
taxes and benefits
Norway
childcare costs
199
199
199
199
199
199
199
199
199
199
199
199
2
4
6
9
2
4
6
9
2
4
6
9
72
70
67
84
81
77
74
90
105
86
80
96
92
90
89
93
91
89
104
98
94
Denmark
Sweden
64
69
91
89
100
99
130
126
92
111
147
139
Australia
56
56
57
60
58
57
37
33
64
60
42
46
New
78
74
74
69
77
68
67
64
105
100
105
100
47
48
36
41
59
62
45
51
150
178
80
96
Zealand
UK
29
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