Policy Changes , Employment , and Single Parenthood in Finland

The labor supply of mothers is infl uenced by women’s preferences and labor market conditions, as well as by family policy packages which enable families to reconcile work and family life. This article deepens the understanding about why Finnish single mothers are facing higher unemployment risks than mothers in two-parent families. The main question is how the changes in the Finnish family policy system have affected the economic and labor market status of single mothers in the last part of the 1990s. Have the changes in family policy affected their entry / re-entry into the labor market? Or can these changes in employment rate be explained by mothers’ personal decisions. Single parents were more vulnerable compared to partnered mothers in parental leave reforms and in the Family reform package in 1994. Changes in the labor market have had an impact on the situation of mothers with small children. One group of mothers can enjoy the full provision of leaves, benefi ts and job security, but an increased share of mothers have become dependent on only basic benefi ts. In this respect, the inequality among mothers has increased.


Introduction
Although women's participation in the labor market has increased everywhere, there are still signifi cant differences between countries.Women's labor market behavior in each country is a product of a complex mix of factors like cultural beliefs, social norms, and personal values.However, there is evidence that the model of the family policy system has effects on mothers' labor market behavior (Esping-Andersen 2002).The Nordic welfare states are usually grouped together, representing countries, where family policies are aimed at supporting the combination of work and family responsibilities.In the Nordic countries, the female labor force participation rate has been higher than in many other industrial countries.However, during the recent years, especially in Finland, mothers' labor force participation has declined.Single mothers have faced a risk of unemployment more often than mothers in two-parent families.
Single mothers' economic situation is now clearly worse than it was at the beginning of the 1990s.This article aims to deepen the understanding about why single mothers are facing higher unemployment risks than mothers in two-parent families.In our earlier study (Forssén and Hakovirta 1999), it was noted that in the beginning of the 1990s, the majority of Finnish single mothers worked, despite the fact they would have had the same or a higher disposable income if they had stayed at home on benefi ts.The main question in our current article is how the changes in the family policy system have affected the economic and labor market situation of single mothers in the last part of the 1990s.Have the changes in family policy affected their entry / re-entry into labor market?Or can these differences in employment rate be explained by mothers' personal decisions.

Data
We will use various different data-sets such as Labor Force Surveys (LFS), the Income Distribution Survey (IDS), and the special survey collected by the Department of Social Policy and the Department of Education, University of Turku.This special survey (WFC2002) data will be used in analyzing women's decisions about employment and care.The research was conducted with a rather large survey in spring 2002.Family type (nuclear family, single-parent family and stepfamily) and ages of the children (3, 6 and 8 years) determined the study population.From this population, 4,160 Finnish families were randomly chosen.The questionnaires were fi lled in by 2,236 parents, and the response rate was 54 %.

Factors connected to women's labor market behavior
The labor supply of women is infl uenced by parents' preferences and labor market conditions, as well as by family policy packages which enable families to reconcile work and family life.Especially mothers have to make various decisions concerning their participation in the labor market.These decisions are affected by economic and social resources, working arrangements, and the availability of private and public day-care services (Hakim 2000).The values of society in terms of child rearing also infl uence the employment of mothers.
Since the beginning of the 1990s, there has been increasing discussion in Finland about the work disincentive effects of generous social policy systems on female labor force participation.It was argued that the welfare states had become too supportive and provided too much welfare, with the result that individuals and families were no longer taking fi nancial responsibility for themselves.This work disincentive discussion has focused strongly on single mothers.The problem of disincentives to work is sometimes also localized to family policy, even though there is general acceptance of maternal choices concerning care periods.The traditional task of family policy is to provide benefi ts for families with children.The modern family policy has other aims besides just an economic one.In the Nordic countries, family policy has to a great extent focused on enabling parents to combine care of children and working life by offering child day-care services and parental leave possibilities.This policy has supported especially women's labor market participation, but also fathers' role as carers.
Incentive for single parents to enter the labor market go hand in hand with extensive public daycare services and also with parental leave benefi ts linked to labor market activity (Bradshaw et al. 1996;Gornik and Myers 2003).Therefore, the role of the welfare state as an incentive for labor supply is twofold.First, the welfare state has created working possibilities especially for women.Second, subsidised child care services have enabled women and single parents to enter into the labor market.(Esping-Andersen 1990;2002).However, despite a relatively high level of employment among single parents, many of them receive public support in order to cope with their everyday life.This need for support is related to the relatively low incomes of single mothers.
Single mothers' labor market behavior can also be analysed using the rational choice theory (Duncan and Edwards 1999;Duncan and Strell 2004).Usually, single parents are seen as instrumentally rational fi gures that typically appear in the neo-classical economic theory as a maximizer of utility.It assumes that single parents make decisions in their lives by calculating benefi ts: they examine the options they face, evaluate them according to their preferences, and in deciding which course of action to choose among those available, people usually do what they believe is likely to have the best monetary outcome (see Elster 1989).Needless to say, this does not provide full understanding of the labor market behavior of single mothers.First, this approach is timeless: decisions are made only for one period and there are no repercussions for the future.Usually, people assess their decisions in with the future in mind (Hedström and Swedborg 1997).Second, values can be pursued just as rationally as any material interest (Etzioni 1988;Hechter 1994).That is to say, people may behave irrationally from the short-term economic point of view, but they may put more emphasis on values in the decision-making.Thus, the internal values are important factors affecting people's choices of whether to work or not.
We can point to two aspects that are relevant in this context.On one hand, in work decisions, fi nancial considerations are not the most important.People work because their jobs are fulfi lling in their own right, providing social esteem and a sense of social integration (Jahoda 1992;Gershuny 1994).On the other hand, the economic approach offers little insight into the question of alternative rationality and women's right to choose caring activities.The combination of single motherhood and paid work is not easily understood through using economic rationality as a primary basis for human actions.Social and individual understanding about what is best and morally right is also a fundamental issue.(Edwards and Duncan 1996;1997;Duncan and Strell 2004.)Every time a single mother considers returning to work, she has to evaluate whether she will earn enough in the job to compensate for the costs of childcare, and whether it will still enable her to spend quality time with her children to compensate for the hours she will have to spend away from home.From this point of view, in taking care of their own children, single mothers may make a rational choice in the light of individual preferences (Hakim 2000).Single mothers give primacy to the moral benefi t of caring for their children themselves over the fi nancial benefi ts of undertaking paid employment and their behavior can be understood through 'gendered moral rationalities' (Edwards and Duncan 1996).Taking up paid work is seen as morally wrong, and this is linked to the male breadwinner ideology in the society.
Single parents' labor market behavior has also been explained by structural factors in the society.If the head of a single-parent family is young, poorly educated and female the family is more vulnerable to social risks.Poorly educated, young people are often in a weak position in the labor market, and during a recession they have a higher unemployment risk than others.Our aim here is to analyse the factors that have affected single mothers' weakening labor force participation in Finland.Have there been signifi cant changes in the population group of single mothers concerning age, education level or the average number of children?If so, do these structural changes explain the weakening labor market position of single mothers.If not, could the explanation be found in single mothers' personal choices, or in changes in the family policy system.

Changes in demographic and educational background
The number and share of single parents among families with children continued to increase during the 1990s in Finland, having started in the 1970s.According to Family Statistics (Statistics Finland), there were 90,000 (14%) of them in 1990, and 118,000 (20% of all families with children) in 2002.In order to get more detailed demographic information, we also use here micro-data of the Income Distribution Survey (IDS).
The age of the mother at the fi rst birth and the age at the fi rst marriage rose in the 1990s.The average age at the fi rst marriage rose by three years, from 26.5 in 1990 to 29.1 in 2002.The average age of single mothers was higher in the latter part of the 1990s than in the beginning.The share of young single mothers, under 30 years of age, was also higher in the beginning of the decade than later.Correspondingly, the share of single mothers over 40 years of age has also increased.
Single mothers more often have only one child (60%) than families as a rule (44%).The ongoing increase in big families can, however, also be seen among single mothers: in the 1990s, both the average number of children per family and the percentage of families with at least three children have increased.Furthermore, it was slightly more common at the beginning than in the latter part of the 1990s that single mothers had new-born babies, or children under three years of age.
The overall increase in the age at fi rst birth and fi rst marriage can at least partially be explained by the longer time spent in education, and in the increased diffi culty fi nding a permanent job.Education level correlates with earnings level, the higher the education the higher the income, as a rule.In most countries, education level also correlates with the number of children, the higher the education level the lower the number of children (Cantillon and Bosch 2002).According to the Income Distribution Survey, single mothers were less well educated than other mothers, especially at the beginning of the 1990s.About a third of single mothers, but only a quarter of other mothers had completed only basic compulsory education.In the 1990s, these shares decreased rapidly towards the 2000s, so that in 2001 one fi fth of single mothers and 15% of other mothers had completed only basic compulsory education.On the other hand, at the turn of the 1990s, there was a very small difference in the shares of single and other mothers at the highest educational level.Nowadays, the difference is greater in favor of partnered mothers.

Changes in the compensation rates
As Anita Haataja presents in her article in this volume, the Finnish family policy faced two different reforms in the 1990s which were justifi ed by the need to save on public spending.The reforms had an impact on gender relations by offering more incentives to reinforce the traditional division of child care and work between parents.This has affected mothers' labor market position and increased income differences between families.
The reforms had an impact on those who had a new-born child or a child under three years of age.The net compensation rate of earnings-related parental leave benefi t was clearly higher than that of earnings-related unemployment benefi ts in the early 1990s.Abolishing child supplements from parental leave benefi t, but not from unemployment benefi t, brought the compensation rates closer.Earnings-related benefi ts offered compensation for lost female earnings of an average around 80 percent at the turn of the 1990s, and around 65-70 percent at the turn of the century.
The level of labor market support and basic unemployment benefi t exceeded the level of the full child home care allowance before and after the second wave of reforms during the recession.The fi rst reform wave increased the net compensation rate of the child home care allowance from about 40 percent to almost 60 percent of the average female net wage.The second reform wave reduced the compensation rate fi rst back to the level of 40 percent, but freezing the benefi t for the next eight years reduced the level to 20-30 percent, depending on the number of children.Labor market support and basic unemployment benefi t are nowadays 35-40 percent of the average net female wages, slightly less than in the turn of the 1990s.
The 1990s can be characterised as the period of when the two-track childcare system was established: either cash for care in parental care or a place in public childcare.Another principal change was individualizing taxation in respect of children by increasing the level of non-taxable child allowances in 1994.The reform equalized the amount of child support for low and high income families, but also decreased incentives for earned income.Otherwise, the benefi t levels increased and decreased over short periods during the decade.Compared with the turn of the 1990s, benefi t levels are lower today, and if compared with the period of recession, much lower.The level of basic unemployment benefi t was lower than the child home care allowance during the recession.Thus, it could be assumed that child care at home was economically not a bad alternative.Later, the situation changed, but the popularity of the child home care allowance did not fall (Laine 2002).
Single mothers were more often losers compared with partnered mothers in parental leave reforms and in the Family reform package in 1994 (Haataja 2005).Next, we analyze whether these changes can be identifi ed in mothers' labor market behavior.According to the rational choice theory, weakening benefi t levels should increase mothers' activity rates in the labor market, and vice versa.

Single parents and the labor market during the 1990s
During the fi rst part of the 1990s, the labor market situation of single mothers, as well as other mothers, and the situation of the whole population changed dramatically.All groups were hit by unemployment, men as a rule more than women, but single mothers' unemployment exceeded that of all other women.Unemployment rates of mothers differ according to the age of the youngest child.When children are under three years of age unemployment is rare, because of the possibility of child home care and respective benefi ts.When the youngest child turns three years of age, and if the carer has no permanent work contract, there is a higher risk of unemployment.Next, we study the labor force behavior of single and partnered mothers on the basis of the Finnish Labor Force Survey.
During the recession years, unemployment hit especially single mothers with children under school age.Since then, unemployment rates have fallen and remained at about the same level as those of single mothers with school-age children.Among partnered mothers, differences in unemployment do not depend so much on children's age as they do among single parents (Figures 1 and 2).

0-6 Children
As shown in Haataja's article, the level of basic unemployment benefi t was below the child home care allowance during the recession years.However, if the parent was entitled to earnings-related unemployment benefi t, the unemployment benefi t could be a more gainful income source than the child home care allowance.Thus, if no work was available after parental leave, the benefi t levels may have had impact on mothers' choices; if entitled to earnings-related unemployment benefi t, the choice may have more often been unemployment, while if entitled only to the basic allowance, the choice may have been the child home care allowance.Among single mothers, the group doing housework increased at the beginning of the 1990's, but among partnered mothers, it had became common already before the child home care allowance came totally into force, and remained rather stabile for the whole period, 1989-2002.
The child home care allowance has been assessed as one of the most contradictory family benefi ts in Finland, as for as gender and even class equality are concerned, because the benefi ciaries are mostly women (Mahon 2002;Leira 2002;OECD 2001;2005;Salmi 2000;Rissanen and Knudsen 2001;Sipilä and Korpinen 1998).The allowance offers fewer citizenship rights than parental leave benefi ts, mostly taken by women, and child home care leave does not accumulate earnings-related benefi ts, such as annual vacation and pension, as does parental leave.
Also the share of "inactive" for other reasons than housework has increased among single mothers, but not among other mothers.This category consists mostly of those who are studying.Among single mothers with children under school age, the share of home mothers has increased considerably since the 1980s.
Figure 1 confi rms the high frequency of unemployment among single mothers compared with other mothers, and especially when children are under school age.Another big difference is that single parents have become more dependent on basic unemployment benefi t and, towards the 2000s, on the labor market subsidy, than partnered mothers.The share of recipients of earnings-related unemployment benefi t is higher among partnered mothers than single mothers, when the child is under school age.As children grow up, the differences diminish in take-up rates of earnings-related benefi t, but the differences increase in take up rates of the labor market subsidy.High take-up rates of the labor market subsidy indicate increased high long-term unemployment among single mothers, before and after child rearing.On the other hand, because labor market subsidy is a means tested benefi t, some long-term unemployed partnered mothers may not be entitled to it.
Table 1.Reasons for staying at home, %.
The majority of mother at home, who are entitled to the child home care allowance, have chosen this opportunity because they want to raise their children themselves, and/or they have many children (at home).This argument is a little stronger among partnered mothers than single mothers.Diffi culties in balancing work and the family are the next most common reason.Here, however, when all home workers or only those receiving the child home care allowance are assessed separately, explanations differ between single and partnered mothers.It is worth noting that diffi culties in balancing work and family life among the recipients of the child home care allowance is at almost the same level (38-41%) among single and partnered mothers, and even slightly higher, in two-parent families.Does this indicate that having a partner does not help the mother's choices very much compared with single parenthood in terms of care responsibilities?
The third common explanation for being at home taking care of children is economic: choosing children's home care is not economically disadvantageous compared to working.This reason indicates that the expected income from paid work, after labor market participation deductions, would not produce better economic well-being compared with the child home care allowance and other social transfers (see Forssén and Hakovirta 1999;2002).A third of single mothers and a fi fth of partnered mothers present this reason as important or very important.
However, few mothers are at home because they do not have paid work.This strengthens the argument that mothers want to stay at home and make the decision voluntary.They use their right to stay at home when their children are young.On the other hand, when asked whether mothers have a permanent job to return to after the child-care period, a huge majority, 86 % of single mothers and 71% of partnered mothers, have The statistically significant differences refer to total.Source: WFC2002 no work to return to.Their work before the child's birth had not been regular, or they had been employed only temporarily.
Mothers returning to the labor market after child-care leave or unemployment may also face obstacles.Common obstacles include lack of job skills, low educational attainment, heavy family responsibilities and diffi culties in fi nding child care (Monroe and Tiller 2001).Table 2 illustrates the factors that mothers consider important when returning back to work.
Table 2. Important aspects when returning to work (%).
Most mothers fi nd fl exible working hours and good child care very important.This is especially important for single mothers, who have no partner to share the daily routines.Meaningful work in general is more important than monetary rewards.However, unemployed single mothers also mention an increase in the household's income as a more signifi cant factor compared to partnered mothers and single mothers at home.

Work commitment of single mothers
The increasing proportion of single mothers outside the labor market has raised a question about the work commitment of single mothers.Especially neo-liberalists argue that welfare-dependent mothers resist efforts to move them into the labor market and call this problem a 'lack of willingness to work' or 'absence of work ethic' (Murray 1984).The primary motive for employment in general is fi nancial need, but are single mothers less willing to do paid work, because of extensive welfare benefi ts?
Work commitment can be measured in a number of ways (see Parry and Warr 1980;Furnham 1982;Berglund 2001;Van Wel and Knijn 2001;Hult and Svallfors 2002).
In this study, single mothers' work commitment is studied by using eight different statements.For each statement, answers were available as alternatives on a fi ve-point scale, where the respondent was asked to choose one of the fi ve alternatives (1=strongly disagree, 5= strongly agree).Table 3 shows the percentages of single and partnered mothers who agree with the propositions, the mean value for each variable, and the statistical signifi cance.Table 3. Work commitment among single and partnered mothers.
On the basis of the earlier study (Forssén and Hakovirta 1999), we would expect single mothers to display a stronger non-fi nancial employment commitment than partnered mothers.For single mothers paid work gives self esteem, a sense of social participation and social contact.
These results show no great statistical differences in the employment commitment of single and partnered mothers.Most of the mothers agree with the statements which support the hypothesis that employment commitment among Finnish mothers is quite strong.Single mothers' opinions differ statistically from partnered mothers' only in the case of one statement 'Having a job to go to is one of the most important things in my life'.This statement refers to the non-monetary motives of work, and implies that work itself appears to be a major factor in single mothers' work commitment.The high value given to work indicates that single mothers work not only for money.Work has a very central meaning in their lives.

Discussion and conclusion
In this article we have shown that single mothers' labor market participation has declined dramatically during the 1990s.In the beginning of the 1990s, the majority (85%) of single mothers with under school-aged children were employed, ten years later the share was 53 %.Changes in demographic structure do not explain this declining Source: WFC2002 trend.The age and educational level of single parents have increased slightly, and this should strengthen their labor market position.
There was a small and temporary increase in young and unmarried single mothers during the recession years.At that time, unemployment was high and care benefi in the form of cash at their highest level of the decade.The increase in the number of single mothers of the beginning of the decade also refl ected a relative increase in unmarried mothers.Economic diffi culties are one reason for the creation of disharmony between spouses, and thus increase a number of family break-ups.If the risk of divorce is higher among low-income families, who suffered real economic diffi culties during the 1990s, this may also explain the worsened situation of single mothers.
The increase, at least temporarily, in one breadwinner families, the one-carer family model, combined with high divorce rates, may also have boosted the poverty risk of single mothers, as has been common in many OECD countries other than the Nordic countries (Forssén 1998).
Most single mothers value employment very highly.Almost 60 % of mothers in both family types would prefer work even if it is not economically worthwhile.However, the economic values of employment are also strong among single mothers: they want paid work to improve the economic situation of the family.On the other hand, the wish to care for their children at home is also strong.Some single mothers choose not to work despite the economic hardship they may experience or the incentives to work provided, because they may consider their role as a mother and homemaker more important.Unemployed single mothers would, however, prefer paid work.Flexibility in working hours, high quality day care and increase in disposable income were the prerequisites for re-entering paid work.
Single mothers prefer to work, but they might be unable to take up paid work because of the poverty traps in the social security system.Therefore, the mechanism for delivering social welfare is an important factor affecting the labor market behavior of single mothers.A job before the child birth has guaranteed the right to earnings-related parental leave and unemployment benefi ts, and a permanent job the right to parental leave with the right to return to the former job.However, temporary work contracts increased in the 1990s, and especially among women in Finland.
Changes in the labor market have had an impact on the social policy model, especially where the situation of mothers is concerned.One part of mothers can enjoy the full provision of leaves, benefi ts and job security, but an increased share of mothers has became dependent on only basic benefi ts.In this respect, the inequality among mothers has increased (Mahon 2002;Borchorst and Siim 2002;Fraser 2000).Long periods at home with children increase the threat of long-term unemployment and a weakening position in the labor market.Statistics and studies indicate an increase in poverty among families with children, and especially among single mothers (Sauli 2001).Cuts in family policy benefi ts, and changes in the labor market are blamed as the main reasons for families' increased economic insecurity.

Figure 1 .
Figure 1.Single mothers' employment rate, and proportion of the unemployed, those working in household and child care, and other not in labor force according the age of the youngest child, in 1989-2002, %.

Figure 2 .
Figure 2. Partnered mothers' employment rate, and proportion of the unemployed, those working in household and child care, and other not in labor force according to the age of the youngest child, in 1989-2002, % .