Disadvantaging Single Parents? Effects of the Cash-for-Care Benefit for Single Mothers'' Employment in Finland

Marika Jalovaara, University of Turku
Kathrin Morosow, Stockholm University

This study examines single mothers'' labour market consequences when taking up the cash-for-care (CFC) benefit that is paid to parents whose young children are not in public childcare. Factors determining employment, such as education, number and age of children, and availability of child care, do affect single and partnered mothers likewise. However, the significance of these factors might differ; being the sole-breadwinner could incentivize employment for single mothers, while available social benefits might have an opposing effect. Considering that single parents face a number of disadvantages, e.g. fewer resources, this paper contributes by answering the question whether single parents are disadvantaged in the long run if CFC is used. Using high-quality Finnish register data during 1987–2009, sequence, cluster and panel regression analysis are applied to assess (1) if and to what extent single parents use CFC benefits, (2) the employment patterns of single mothers (vs. partnered), and (3) the long-term consequences of CFC for single mothers’ employment.

Following mothers for 15 years after first childbirth, and considering the timing of single motherhood, first results show that CFC is used extensively by all mothers – even by mothers that had their first child unpartnered. Sequence and cluster analysis revealed that this group of single mothers is quite heterogeneous: almost half of these women form a continuous partnership, while the other half stays unpartnered. About 60% of these mothers show stable employment trajectories, one third of which are continuously single. While 25% are characterized by long unemployment spells or unstable employment – all continuously unpartnered, about 15% display very long leave spells - all continuously partnered. Next steps include describing the patterns of single mother’s CFC take-up by timing of single motherhood, and panel regression to model long term consequences for single mother’s employment.


Introduction

Thispaper examines the effects of the cash-for-care (CFC) benefit - a controversialbenefit paid to parents whose young children are not in public childcare – on employmentof single mothers. What is known from previous research about the CFC benefitis that the take-up is highly gendered, as more than 90% of the recipients arewomen; mothers with less education, low income level and many children seem tobe overrepresented (Repo,2010); and it reduces maternal labour forceparticipation in the short-run (Kosonen,2014). Finland is one of the few countrieswhere single mothers’ employment has decreased, and is currently below those ofpartnered mothers (Härkönenet al., 2016). In addition to that single motherhoodin Finland has increased particularly among lower educated women.

Whatis not known, however, is if and how single mothers use the CFC benefit, andhow it affects their employment patterns in the long-run. Considering thatsingle parents face a number of disadvantages, e.g. fewer resources, this papercontributes by answering the question whether single parents are disproportionallydisadvantaged in the long-run if CFC is used. This study assesses (1) whetherand to what extent single parents use CFC benefits, (2)the employment patterns of single mothers (vs. partnered), and (3) thelong-term consequences of CFC for single mothers’ employment.

TheCash-for-Care Benefit and Single Mother Employment

Researchhas shown negative effects of cash-for-care on mother’s employment in the short-runfor Norway (Naz,2004; Rønsen, 2009; Schøne, 2004), and in Sweden (Giuliani& Duvander, 2017). For Finland, Kosonen(2014) found that the CFC benefit (whileeligible) reduced maternal labour participation by 3 percentage points witheach €100 increase in the supplement.

Butwhy would one expect single mother’s employment to be affected differently bythe use of CFC than partnered mothers? Employment determining factors such aseducation, number and age of children as well as availability of child careaffect both partnered and single mothers’ employment (Gonzalez,2004; Gornick, 2004). However, single mothers inFinland are increasingly characterized by lower education and labour marketattachment, the significance of these factors, hence, differs between singleand partnered mothers. Single mothers are the sole breadwinner, thus areassumed to have higher employment incentives (Gonzalez,2004); contradicting this argument are thedisincentivizing effects of social benefits available to single mothers.Further, single mothers are more dependent on public child care than partneredmothers (Connelly& Kimmel, 2003; Misra et al., 2012),are assumed to be less flexible when it comes to working hours, and might faceeven higher discrimination by the employer than mothers in general do.

Data andMethod

High-qualityadministrative population register data are used; covering the periods from1987-2012. In a descriptive first step the employment trajectories for singlemothers compared to partnered (cohabiting and married) mothers will be analysedby means of sequence and cluster analysis, following mothers for 15 years fromtheir first birth, with a focus on the differences in single motherhood timing:mothers that have their first child without a co-resident partner facedifferent decision processes than mothers that separate while using CFC or evenafter they used CFC. Therefore, sequence and cluster analysis has beenconducted for all mothers, for (n)ever single mothers, as well as for singlemothers at first birth and for mothers that separated while using CFC. In asecond step the effect of CFC on employment of single mothers will be analysedusing panel regression.

Results

Conductingthe sequence analysis this study distinguishes between six separate statescombining partnership and employment: employed/partnered, employed/unpartnered,unemployed/ partnered, unemployed/unpartnered, leave/partnered, and leave/unpartnered.The combination of partnership and employment is important to distinguishbetween the timing and duration of single motherhood.

Lookingat a very specific group - single mothers at first birth - analysis shows sixdistinct clusters (figure 1). Interestingly almost all those single mothers douse CFC, also extensively for between 3-5 years. Cluster one to three showmothers that partner quickly or later, while cluster four to six contain mothersthat are continuously unpartnered. Only cluster 5 and 6 show fragmentaryemployment with periods of unemployment or continuous unemployment. Hence, singlemothers at first childbirth are a heterogeneous group: about 60% show stableemployment trajectories, 25% are characterized by long unemployment spells orfragmented employment, and about 15% display very long leave spells.

Next Steps

Next steps willinclude describing the patterns of single mother’s CFC take-up, and differencesin employment trajectories based on timing of single motherhood. Further, theclusters will be analysed by means of multinomial logistic regression to understandwhat factors characterise the groups. Finally, panel regression models will beused to asses employment consequences. Results will be available in time forthe EPC meeting.

Presented in Session 1206: Policy Issues