Social investment policies that women want

by Hanna Schwander and Julian Garritzmann

What kind of welfare state do women want? Despite much progress in the strive for equal opportunities between women and men in modern societies, women still face more and different social and economic risks than men. They are more likely to be poor in old age, in particular after a divorce, more likely to work in atypical employment, and more likely to shoulder the double burden of care and paid work. The welfare state plays a crucial role in mitigating these risks. Over the last decade, policy-makers have taken a new approach to combat risks. Instead of passively compensating citizens in the event of misfortune, as the traditional welfare state does, the social investment welfare state centers on fostering human skills and capabilities. Its policies, such as childcare provision, education, and active labor market policies, aim to increase the employability of citizens and to help them to find “good jobs”.

Accordingly, women are often argued to be among the main supporters of such a social investment welfare state, because they are the clearest winners of the social investment turn: Women benefit from social investment as care-givers as it enables women to participate in the labor market. Moreover, social investment services (e.g., childcare facilities or schools) are an important source of female employment. The argument is echoed in the study of women’s political realignment from conservative or religious parties to parties of the left, with the latter being more social investment friendly. Yet, we know very little about women’s preferences towards the social investment state, let alone whether they prefer a social investment state over a compensation welfare state.

In a study recently published by the Journal of European Social policy [link], we investigate exactly this question. The Covid pandemic renders this question even more pressing, as many families feel the strain from both closed daycare centers and schools and from waning employment opportunities as many sectors are closed down. Challenging common assumptions in social investment research and the literature on women’s political realignment, we propose that women are not core proponents of social investment at large. Rather, we advance the argument that women are more supportive of some social investment policies, but not others by introducing a more fine-grained distinction between three types of social investment policies: “skill creation” policies providing individuals with new or updated skills; “skill mobilization” policies facilitating the use of one’s skills on the labor market; and “skill preservation” policies helping to safeguard and bolster one’s skills and capabilities during critical life-course transitions (such as parental leaves or spells of unemployment).

Based on a rational choice logic, we argue that women are more likely to favor social investment policies that aim at preserving and mobilizing their skills, while gender differences should not occur in the case of skill creation policies. As the Covid crisis demonstrates, most women still bear the main responsibility of care work within their families, resulting in several labor market disadvantages. Despite rising female labor market participation, women are still likely to withdraw (at least) temporary from the labor market or to reduce their working hours when starting a family. As a result, women face additional social risk on account of these likely career interruptions and the difficulties of reconciling work and family life. Yet, at the same time – at least in most advanced economies and for younger generations – women’s educational attainment has not only caught up with but even exceeds those of men. Our hunch is therefore, that women’s main struggle on the labor market is not the acquisition of skills. Rather, women’s main challenge is the employment of such skills and preservation of skills in case of career interruption. If we translate this into demand for welfare state spending, they should therefore support spending on Early Childhood Education and Care policies (ECEC) and Active Labor Market Policies (ALMP) more than men but we expect no gender differences regarding education.

Our empirical analyses based on data from the INVEDUC project covering eight European countries demonstrate just this. The figure below shows average marginal effects of gender on preferences for additional spending on Early Childhood Education and Care policies, education, and Active Labor Market Policies and the corresponding confidence intervals, based on four model specifications with different sets of control variables. Gender differences manifest where the confidence intervals do not cut the vertical zero-line.

We find indeed that women are significantly more likely than men to support skill mobilization and skill preservation policies, but our analysis does not reveal any significant gender differences in support for skill creation policies. That means that even before the pandemic, women’s interests lay in state interventions that allow to mobilize and preserve skills.

Compensation or investment?

Now, in a situation such as a global pandemic but also in general, policy-makers may also resort to compensating citizens for income loss, for instance by extending unemployment benefits or increasing passive family allowances. Support for that more traditional approach to handle social risks is strongly driven by material interests as the literature on social policy preferences has evidenced time and again. Considering that women are – regardless of skills – often in an economically more vulnerable position than men, compensation should also be highly attractive to women. But what do they prefer if forced to choose between investment and compensation?

We examine such a scenario where social investment expansions are only possible at the expense of social compensation for two specific cases: A) a trade-off when support for families comes at the detriment of unemployment benefits and B) when support for families means cuts in old age pension benefits. Figure 2 shows the gender differences for support of these two trade-off scenarios, again in four model specifications. The results suggest that women find it very difficult to choose between social compensation and social investment, even more so than men. In both trade-off scenarios, the coefficient of gender is negative and significant at a 95% level. Substantively, this implies that women are less likely than men to support social investment expansions at the expense of social compensation.

Concluding remarks

Covid demonstrates that – despite much progress in the strive for equal opportunities between women and men – women still face more and different social risks than men. They are more likely to be poor in old-age, in particular after a divorce, more likely to work in atypical employment and more likely to shoulder the double burden of care and paid work. The diverse social risks that women face are reflected in their attitudes towards the welfare state as our study shows: They support both policies that help them to employ their capabilities in gainful employment and preserve them in times of career interruptions as well as policies that compensate for foregone employment possibilities.

This blog post is based on an article published in the Journal of European Social Policy.