6 Conclusion and discussion
People who are not participating in the labour force are in a position where the net income to be gained from paid work is not sufficiently attractive to entice them into foregoing any of the other unpaid, but no less valuable, uses of their time. Labour force participants, on the other hand, are either employed or actively seeking work.
New Zealand women’s labour force participation rates are lower than men’s at all ages and exhibit a characteristic “dip” in the younger age groups. Women’s participation rates have been rising since the Second World War, and each cohort of women has had a greater level of participation, at all ages, than their predecessors. Women’s participation rates are projected to rise further, at least in the older age groups, over the next decade.
Among New Zealand women, the presence and age of children, being a sole or partnered mother and level of qualifications have a strong effect, and each factor has an effect which is independent of the other two. Mothers with different combinations of these characteristics have widely varying participation rates. At one extreme, for example, sole parents with a pre-school child and no school qualification have a participation rate of only 32%. At the other extreme, partnered mothers with a child aged 10-17 and with a post-school qualification have a participation rate of 91%. Clearly, in terms of labour force participation, women, even younger women with children, are a diverse group. Family factors also explain the dip in women’s participation: women aged 25 to 39 years have low participation rates because women in this age group are the most likely to have pre-school children at home.
Compared to other OECD countries, New Zealand has a relatively high overall female participation rate. Yet, participation rates for women between the ages of 25 and 39 are conspicuously low by international standards. Few other countries show a dip in participation rates in the peak childbearing ages. This point of difference seems to be driven by a combination, in New Zealand, of relatively low participation rates among mothers with young children and sole mothers, together with high fertility rates and high proportions of sole parent families.
While New Zealand women tend to leave the labour force when they have children, they also tend to return strongly to paid employment when their children get older. The participation of New Zealand women with older children, and with no children, is relatively high compared to other countries and, as a consequence, New Zealand women aged 45 years and over have strong rates of participation compared to older women in other countries.
This pattern of participation over the life-cycle may in part reflect a different life-course approach in New Zealand compared to many other countries: in New Zealand the balance between motherhood and participation might be achieved more by sequential rather than by concurrent patterns of paid and household work. In other words, women in New Zealand do not necessarily wish to combine work and childrearing at the same time, but to wait until their children are older before spending a good period of time in paid employment again. Alternatively, the participation of younger mothers in New Zealand may be low because of difficulties in accessing satisfactory childcare or suitably flexible jobs, or because the market wages that younger mothers can earn are not high enough to entice them into joining the labour force.
Differences in participation between countries may also reflect differences in government policies (such as tax and benefit policies) or social norms (such as the attitudes towards, and expectations of, women working compared to looking after their children). OECD countries can be grouped according to their pattern of women’s participation across ages, and these groupings to a considerable extent reflect similarities in the countries’ values, social conventions, institutions and recent histories. Not surprisingly, New Zealand’s profile is most similar to Australia and the United Kingdom: countries with which we share a common heritage. The participation profile of New Zealand men, relative to the OECD, is also similar in many ways to that of New Zealand women, with relatively high participation rates for younger and older people, but relatively low rates for people aged around 25-39. These similarities support the case for the existence of particular “country effects”, which affect both women and men.
Finally, as illustrated in Section 5.4, the differences in participation between countries might to some extent be spurious, reflecting the definition of participation, or each country’s interpretation of that definition. It is difficult to know how big this effect is, although the maximum effect is marked.
How does all this inform the public policy question of whether, and how, to encourage the participation of New Zealand women? Some initial thoughts are hazarded here. Firstly, since different groups of women, and mothers, have widely differing participation rates, any policies which aim to increase the participation of women would need to be carefully focused. One type of policy is unlikely to work for all women. Also, since some groups of women already have high participation rates, policies which aim to increase this participation even further may incur high deadweight costs.
The analysis in this paper also shows that the presence of pre-school children is a key factor in explaining women’s participation in New Zealand, and compared to other countries. This reinforces the fact that the desirability of time spent with young children versus working is central to policy considerations. Such considerations need to go beyond the simple participation/non-participation analyses presented in this paper, and think about the time spent at work and at home by both parents combined. As Figure 1 shows, the hours that New Zealanders work, relative to the size of the working age population, are already among the highest in the OECD.
In the short-to-medium term, overall participation rates for women in New Zealand are likely to rise without any change in policy settings, although there may be some fluctuations according to the state of the economy. Policies which aim to increase women’s participation may be pushing a rock downhill. Historically, women’s and men’s participation rates in New Zealand have been gradually converging, as have been women’s participation rates in the OECD. It would be no surprise if these trends continued in future decades.
Finally, we need to consider how much to concern ourselves with differences in participation rates between countries. Some of these differences are rather fine and perhaps even spurious. Some are more considerable, such as the difference between the participation of young women in New Zealand and in the Nordic countries. However, although this “gap” clearly shows that an increase in participation is possible, it says nothing about the costs and benefits of increased participation. Also, it may not be straightforward to quickly imitate the patterns of participation which other, very different, countries demonstrate. Women’s participation rates as high as those in the Nordic countries are not likely to be achieved through one or two policy instruments, but may require sustained social change over a longer period of time.
