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Are we all in this together? Alleviating

childcare
Alleviating the childcare constraint constraint for
women
for women in economic crises
Gabriella Cagliesi 1245
Department of Economics, University of Sussex, Brighton, UK, and
Received 24 October 2020
Denise Hawkes Revised 6 March 2021
Department of Economics and International Business, University of Greenwich, Accepted 3 May 2021

London, UK

Abstract
Purpose – The purpose of the paper is to advocates the use of gendered economic policies to stimulate a post-
COVID-19 recovery. It alerts on the risk of ignoring the female dimension of the current crisis and of resorting
again to austerity programs that, like the ones enacted after the 2008 crisis, would hit women and mothers
disproportionally harder than other groups.
Design/methodology/approach – The authors use data from the British Household Panel Survey on female
participation and account for gendered constraints and enablers missed by mainstream economics. Using a
sequential empirical approach, the authors simulate various welfare policy scenarios that address factors, such
as childcare costs, personal and social nudges, that could help women back into the labor market in the
aftermath of a crisis.
Findings – The authors found that incentive-type interventions, such as subsidies, promote female labor
market participation more effectively than punishment-austerity type interventions, such as benefits’ cuts.
Policies oriented to alleviate childcare constraints can be sustainable and effective in encouraging women back
to work. Considering factors wider than the standard economic variables when designing labor market policies
may provide fruitful returns.
Originality/value – The sequential methodology enables to estimate current and counterfactual incomes for
each female in the sample and to calculate their prospective financial gains and losses in changing their labor
market status quo, from not employed into employed or vice-versa. Welfare policies affect these prospective
gains and losses and, by interacting with other factors, such as education, number and age of children and
social capital, prompt changes in women’s labor market choices and decision.
Keywords Childcare, Economic crises, Policy simulations, Cross-disciplinary approach, Female labor market
participation, Gender-budgeting
Paper type Research paper

Introduction
Crises elicit memories and stimulate reflections on the types of lessons learned from them.
One of these lessons is that often the human, social and economic costs of a crisis fall unevenly
upon communities: some groups bearing more significant personal and financial sacrifices. In
2019, the UN Special Rapporteur on Extreme Poverty and Human Rights confirmed again the
structural disadvantages faced by UK women and indicated that by 2021–2022, due to the
austerity measures, the income of single parents (90% of whom are female), in the bottom
quintile would drop 25% of their 2010 income, with a shocking associate jump in the poverty

The authors would like to thank the participants of the Sussex Departmental Seminar for their
comments and thoughts especially Peter Dolton and Julie Litchfield and the participants of the International Journal of Social
Greenwich Departmental Seminar especially Ozlem Onaran. The authors would also like to thank the Economics
Vol. 48 No. 9, 2021
participants at our presentation at the Cognitive Economics Workshop at the King's College London and pp. 1245-1263
the authors are grateful for the insightful comments offered by the anonymous peer reviewers of the © Emerald Publishing Limited
0306-8293
journal. All remaining errors are our own. DOI 10.1108/IJSE-10-2020-0718
IJSE rate for children in single-parent households. Another lesson is that some governments’
48,9 responses to crises can deepen pre-existing economic and wellbeing gaps. A third lesson is
that social and economic systems do not react linearly to crises and shocks but develop
hysteresis and complex patterns that make the future hard to predict. This health crisis is
showing that it will not be different from past ones. There will be again groups shouldering
disproportionate burdens. The young, women and those in lower-paid jobs, will be more
severely affected than others for their intersectionality with key service sectors and sectors in
1246 prolonged lockdown (Resolution Foundation, 2020). Evidence from a cross-country
comparison using World Bank Data finds differential impacts of the COVID crisis on
female labor market activity. The study finds the strongest link between reductions in labor
market engagement in response to the need to look after children and home school during the
COVID crisis (Hyland et al., 2020). Developed and developing economies will again face the
risk of replicating past mistakes with policies that, if not carefully calibrated, can exacerbate
the pre-crisis economic divides and consolidate persistent structural gaps. So, although our
focus is on the United Kingdom, this issue is relevant to many other developed and
developing economies.
Ten years ago, in the aftermath of the financial crisis, the then UK Chancellor declared
“We are all in this together” (Osborn, 2009) but robust empirical evidence demonstrated a
different story. At the beginning of this crisis, the current UK Chancellor used the same
quote, which triggered alarming memories. Will this time be different? Could past
mistakes and austerity be avoided? These questions and concerns prompted our
research.
We believe that, despite a ten-year time lag, many constraints faced by women in the
aftermaths of the 2008 financial crisis period, will re-emerge in the COVID-19 crisis, and
that, now as then, women risk to shoulder an unequal share of the costs of the crisis. These
beliefs urged us to use a gender lens of the past financial crisis as a warning and a reminder
of the importance to resort to gender-budgeting policies to soften the economic burden of
the current COVID-19 crisis on women, particularly on mothers, many of whom have
compromised their financial security – in the short or in the long run – to look after their
school-aged children. In this spirit, we used data collected in the aftermath of the 2008
financial crisis, before austerity policies worsened women’s position and identified
constraints and enablers faced at that time by women in labor market decisions, many of
which are likely to be at play today. We simulated policies that could have, to some degree,
alleviated some of those burdens and helped non-working mothers to re-engage with the
labor market. The ultimate goal of re-running the past is to alert for the future and to
remind today’s policymakers not to disregard this time, the needs and experiences of those
women who are among the more vulnerable groups of the society (Women’s Budget Group,
2018; Trade Union Congress, 2015). This paper does not aim to compare the two recessions
rather to use the evidence of the policy impacts of government response to the financial
crisis recovery to ensure women are not double hit by a she-recession with enhance child-
care responsibilities from home schooling and austerity-style policies. We therefore aim to
promote the consideration of a gender budget approach in the post-COVID recovery
period.
This work builds on previous empirical results (Cagliesi et al., 2017; Cagliesi and Hawkes,
2013) but it focuses more sharply on women employment and non-working statuses, and it
expands the dimensionality of women’s decisions by enlarging the standard labor market
model to include social, cultural and psychological factors in shaping women’s opportunities
and constraints. This interdisciplinary approach enables to gain useful policy insights that
could inspire a more effective architecture of government interventions to alleviate women’s
increased vulnerability in periods of crisis.
Stylized facts: the pre-COVID world Alleviating
The last 50 years have seen a global dramatic increase in participation of women in paid childcare
work. Table 1 reports the pre-financial crisis 2008 and pre-COVID crisis 2020 figures for the
UK labor market. These numbers confirm a shift for women from inactivity (due mainly to
constraint for
caring responsibilities) and unemployment into employment (Office for National Statistics, women
2019b). Since the financial crisis, the increase in employment has been particularly rapid and
significant for women in couples, for women in their early 60s and for those in the lowest
income deciles, primarily single mothers. 1247
This job surge, however, has been associated with wage stagnation, rising state pension
age, welfare cuts, increase in the precariat and longer hours at work (Resolution Foundation,
2019). In other words, households, particularly those with children and those on lower
incomes, have reacted to real earnings reductions by supplying more work. For many this
response has not always been enough to shield their finances. Shockingly, almost 60% of
those in poverty in the UK are in families where someone works.
Among the workers, and despite some improvements, women are still experiencing lower
pay than men, a higher concentration in part-time jobs and more interrupted careers owing to
care commitments (Castellano and Rocca, 2015). Often their dual roles, as workers and as
primary caretakers of children, affect the type and quality of job they can access or aspire. In
the UK, the percentage of non-working or part-time women’ due to personal and family
responsibilities’ is almost twice as high as the European Union (EU) average (Council of the
European Union, 2015), and working single mothers are almost twice as likely to be in low-
paid, low-skilled employment with little chance of progressing than coupled mothers. In 2019,
the UN Special Rapporteur on Extreme Poverty and Human Rights denounced the structural
disadvantages faced by UK women, particularly by the single group, whose likelihood of
experiencing persistent poverty was twice as high as any other group.
This reality combines with the very high cost of childcare -about 46% of women’s gross
median earnings
thus, for some women, especially lone parents, the cost of childcare can
still be a significant barrier to entering the workforce. Research showed that those mothers
who return to work bear a motherhood penalty (Kahn et al., 2014)
a pay gap and hiring
disadvantages between working mothers and similar women without dependent children

which, in the UK, is particularly acute at higher managerial levels.

We are all in this together but unequally. The risk of a “she-session” and of ignoring it
Giving these pre-existing gaps and gender inequality, how is the current crisis going to affect
women’s labor market choices and conditions? This current crisis that, for its unequal gender
impact, has been termed “She-session” [1] has exposed women on two fronts: at work and
home. At work, because, women, who are more likely to work in services and industry
involving face to face interactions, have been hit harder by the crisis and face a much higher
risk than men to lose or quit their jobs. At home, because in addition to sex segregation, “pink”
sector crisis, or discrimination, many mothers have chosen to leave their jobs and look after
their home-schooled children. Will they go back? This question is particularly concerning and

July-September 2008 July-September 2019

Pre-crises Men Women Men Women

Employed ratio 78.3% 66.7% 80.3% 71.8%

Unemployed rate 6.3% 5.3% 4.2% 3.6%
Inactive ratio 16.3% 29.6% 16.2% 25.4%
Inactive carers (home) rate (as percentage of inactivity) 6.2% 36.3% 6.6% 33.1% Table 1.
Source(s): Office for National Statistics (2019a, b) UK labor market
IJSE relevant because, since 2000 and until the pandemic crisis, the rate of mothers in employment
48,9 has progressively, overtaken the employment rates of women without dependent children,
and even before the crisis 3 in 10 women with a child aged 14 years and under, reported they
had reduced their working hours because of childcare reasons. This figure compared with 1 in
20 fathers (4.8%) (Office for National Statistics, 2019a). Welfare policy that help women and
mothers back to work could be a critical factor in reducing structural gaps in the UK and
beyond (Castellano and Rocca, 2020; Shittu and Abdullah, 2019) and in accelerating the
1248 recovery.
For many women, working is a channel through which to gain autonomy, a sense of
identity, status and influence at home and in society. This opportunity ought to be preserved.
For other women, staying at home is a genuine personal choice to be respected and not
“stigmatized.” It is essential to understand the difference between preserving freedom of
choice and promoting social, personal and economic wellbeing. The interdisciplinary
approach that we propose acknowledges these different realities.

Theoretical framework: an interdisciplinary approach

The traditional neoclassical analysis simplifies the complexity of women’s labor market
decisions reducing the process to a choice based on pecuniary considerations and the
comparison of the opportunity cost of a non-working relative with the advantage of leisure.
We believe that a good understanding of labor market choices would require a unified
approach across different disciplines, and we propose a multidisciplinary approach that
captures the interface of social and personal spheres. We depart from the utilitarian approach
and consider insights from the capability approach (CA) proposed by Sen (1980) and from
behavioral economics (BE). The CA sees any economic agent as being both socially embedded
and individually free with a distinct identity. BE identifies psychological and cognitive biases
that can explain why economic decisions depart from the rationality assumption.
The CA and social norm models have been used to study labor market decisions.
Theoretical approaches, such as the segmented market theory (Bowles and Gintis, 1998,
2011), the human capital theory (Becker, 1976), and the job search and information models
(Mortenson, 2003), and empirical studies (Burchardt and Le Grand, 2002; Clark, 2003;
Akerlof, 1980) have considered and assessed the effect of social influence in labor market
decision-making. However, in these models, the role of social influence has often been
treated as a static external force rather than a dynamic interactive relational process
(Granovetter, 1985), whose interplay with other behavioral and psychological factors,
affects the decision-making process. The strength of specific individual relations (social
ties) and the structure of the social network can influence labor market decisions (Goyal,
2007) via informational, motivational and expectational effects. To gain useful insights into
female labor market decisions, we control for social capital and interpersonal social
relations (networks) factors.
The other crucial dimension to consider in the analysis is the personal capital. A large
body of literature from BE and psychology presents evidence about people’s choices that
would not match the “economic-rational” paradigm. Prospect theory (Kahneman and
Tversky, 2000) provides a cognitive decision-making framework that justifies “economic
irrationality” on the grounds of the existence of some cognitive biases, on mutable emotional
states, on different personality traits, on the effects of memories of past experiences
(Kahneman and Krueger, 2006) and cultural factors.
We believe that our novelty approach to consider the interplay of social, psychological,
economic factors in labor market decisions could help design more informed public sector
policy and successful nudges (Oliver, 2013).
An empirical multidisciplinary approach: methodology and variables Alleviating
In this study, we used a two-step approach: in the first step, we used an endogenous switching childcare
regime model to estimate labor earnings of employed females, non-labor earnings of non-
employed females and their counterfactuals. In the second step, we used a multinomial probit
constraint for
model to estimate the probabilities of three labor market categories: inactive non-working women
carers (mothers), unemployed and employed females. The data set used to test our
hypotheses is the 2009 wave of the BHPS (British Household Panel Survey). As explained
earlier, we selected 2009 as this was the last period when the UK economy was in a weakened 1249
state and before the austerity drives of the conservative and the previous coalition
governments of 2010–2020 policy options for the labor market recovery post-COVID. The
sample composition is explained in the Appendix.

The econometric models

Our first model is an endogenous switching regime model of labor and non-labor earning
equations with a criterion equation, which determines in which regime (employment versus
non-employment) an individual could be. This model produces estimates of factual and
counterfactual incomes of each individual (such as the working earnings of a non-working
female if she became employed and the non-labor earning of a working female if she did not
work) and enables to calculate the prospective financial gains and losses of changing the
labor market status quo, from not employed into employed or vice-versa. To test if people act
more to avoid losses than to obtain gains (the loss aversion principle of prospect theory, in
BE), we separated prospective gains (Prospectpos) and prospective losses (Prospectneg). The
former includes only prospective financial gains (e.g. the increase in income if a female
switched from non-working into employment), and the latter includes only prospective
financial losses. A difference in their coefficients would indicate the differential (asymmetric)
effects of facing prospective financial gains in becoming employed. The results of the
switching regime model are reported in the Appendix [2].
In the second step, we use a multinomial probit model, to estimate the probabilities of a
woman being non-working carer, unemployed, or employed, while controlling for several
variables. This model has the following form:
Pim ¼ Pr½Yi ¼ m j LMVi ; BEVi ; f ðPROSPECTNEGðPOSÞi Þ; SatVi ;
(1)
SNVi ; INTERACTIONi 

Where:
Pim is the probability for individual i to fall in the category m, with m 5 1, 2, 3 and with
1 5 non-working carers, 2 5 unemployed, 3 5 employed (reference category);
LMVi is a set of labor market variables for individual i;
BEVi is a set of behavioral variables for individual i;
f(PROSPECTNEG(POS)i) is the value function of prospective financial losses
(Prospectneg) or gains (Prospectpos) faced by individual i when changing status from
worklessness into employment (or vice-versa) and are obtained from the estimates of the
switching model [3];
SatVi is a set of subjective wellbeing variables for individual i;
SNVi is a set of social relations and network variables for individual i;
INTERACTIONi is a set of interaction terms of social and personal factors for individual i.
IJSE Some of the variables we used in our estimates were directly available from the survey; others
48,9 had to be created as combinations of answers to questions in different parts of the
questionnaire. We organized them in “direct factors” and “interaction terms,” and we limit
here our description to the ones that turned out to be statistically significant in the
multinomial probit model while referring the interested reader to Cagliesi and Hawkes (2013)
for a full description of all the variables created for the two-stage estimation process and for
more detailed explanation for the theoretical links.
1250
Variables: direct factors
In line with the CA approach, we propose to use three categories of factors (personal
characteristics, psychological factors and social factors) that, acting either as constraints or
enablers, can affect a woman’s opportunity and choices. The first set of factors are grouped
under the umbrella of “labour market variables or human capital factors” since they typically
are included in standard labor market models. These variables are age, education,
employment history, parents’ employment and non-employment status, physical condition,
marital status, number and age of children.
The second set of factors includes variables that capture BE principles (such as loss
aversion, self-esteem and confidence), variables that reflect personal beliefs and values
regarding jobs and family and variables that are related to psychological traits and subjective
perception of wellbeing. These attributes are derived from different sections of the BHPS, and
higher values indicate a stronger presence of the attribute.
The third set refers to the respondents’ social characteristics, social capital (the closest
three friends and their labor market statuses) and the strength of embeddedness and social
relations (having local friends, belonging to the neighborhood, etc.). Social norms and “close
ties” represent vital additional elements of the analysis.
In the CA spirit, we also included a set of variables related to opportunities and capabilities
such as current access to or ownership of goods and services (such as access to a car, the Internet,
ownership or shared ownership of a house, ownership of a mobile phone, satellite and landline).

Variables: interaction terms. Labor market “social network norm” and personal views
We were interested in checking if the labor market decisions of close friends could
reinforce or weaken motivation and efforts in finding employment. To test these
hypotheses, we extended Akerlof’s work (1980) and created some interaction terms that
should capture the intersectionality between the social sphere and the personal sphere.
The first interaction term (GinterACTtie) is a dummy variable that identifies
respondents whose three closest friends (strong ties) are all labor market active
(employed or unemployed). This condition may act as an enabler to move into
employment. The second type of interaction is between the labor market status of the
three closest friends (all employed versus some or all not unemployed) with the
respondent’s working ambitions (attributing a very high versus very low importance to
having a fulfilling job). Out of the four possible dummies, only the two linked to lack of job
ambitions turned out to be relevant for non-employed women. The first dummy (conform
to a non-working network) represents the case of a not job-ambitious woman with some or
all non-working friends. The other relevant dummy is deviate from a working network,
and it represents the case of a not job-ambitious woman, but this time all of her closest
friends are employed. The statistical relevance of these two specific dummies in our
estimates and the irrelevance of one of the other two would suggest that lacking job
ambitions (i.e. having a more emotionally detached “personal disposition” toward the
labor market) are a significant constraint for a non-working female to switch into
employment. The difference in their coefficients could indicate if, given that disposition, Alleviating
the types of the network can make a difference. childcare
constraint for
Results women
Table 2 reports the statistically significant coefficients of the multinomial probit regression.
As expected, having young children and being a lone parent are significant constraints,
ameliorated by higher education. Prospective financial gains incentivize a non-working 1251
mother and unemployed females to become employed, while prospective financial losses
discourage a change of the status quo. Moreover, following the predictions of prospect theory,
these effects are asymmetric, and the reaction to an economic loss is bigger than the reaction
to an equivalent economic gain.
Non-working carers are also affected by BE and social variables: stronger family life
values, loss of self-confidence and a higher degree of embeddedness in the local community
(particularly in communities characterized by high levels of non-employment) are all factors
that increase the probability of a non-working mother status. On the other hand, having

Non-working carers Unemployed female

category category
Z Z
Variables Coefficients values Coefficients values

Being of age 21–24
1.32(**)
2.02

Being of age 25–49
1.45(***)
4.86
Mother not working when respondent was 14
0.25(**)
2.36
Higher education
0.25(**)
2.01
Having child(ren) (age 0–2) 1.10(***) 8.02
Having child(ren) (age 3–4) 0.61(***) 4.27
Having child(ren) of (age 5–11) 0.27(***) 3.72
Having child(ren) (age 12–15) 0.19(**) 1.98
Being a lone parent 0.42(***) 2.57
Conscientiousness
0.04(***)
3.33
Neuroticism
0.21(***)
2.75
0.21(*)
1.83
Neuroticism and being 24–49 years old 0.18(**) 2.15 0.37(**) 2.09
Be less confident 0.10(**) 2.20
Loss of confidence 0.15(***) 2.70
Be prone to take risks
0.03(**)
2.08
Degree of importance of family life 0.08(***) 4.99
Degree of satisfaction with family life
0.05(**)
2.38
Regional non-employment rate if above 20% 1.80(***) 5.56 1.75(***) 3.00
Proportion of unemployed friends 0.76(***) 3.00
GinterACTtie (strength of social norm)
0.44(***)
2.64
Conforming to a non-working network 1.19(***) 9.26 0.63(***) 3.18
Deviate from a working network 1.21(***) 7.30 0.72(***) 2.98
More embedded in the local community (*) 0.21(*) 1.72
Value function: prospectneg (losses)
0.05(***)
13.45
0.03(***)
5.23
Value function: prospectpos (gains)
0.02(***)
7.21
Capabilities
0.20(***)
4.59
0.38(***)
6.90
Financially worse than previous year 0.69(***) 4.37
Log Likelihood 5
1168.43; Wald χ (60) 5 998.93;
2
Table 2.
Prob > χ 5 0.0000
2
Multinomial probit
Note(s): (***) 5 statistically significant at 1%; (**) 5 statistically significant at 5%; (*) statistically significant model – employment is
at 10%; both categories had the same regressors; absence of coefficients means that those variables were not the reference
statistically significant category (N 5 3,526)
IJSE stronger ties with labor market active close friends, having more availability of capabilities
48,9 (such as a house, a car, the Internet and a mobile phone) and personality traits such as
conscientiousness, are all factors that increase the probability of a working status.
Personal stance toward the labor market plays a role: lacking job-ambitions (having a
more emotionally detached labor market attitude) results in a higher probability of becoming
a stay-at-home carer, even when surrounded by employed close friends. It may become more
difficult to engage these women, and policies here should aim to nudge a change in the
1252 attitude, to instill self-confidence and to offer mentorship, betterment and training
opportunities.
We computed marginal effects (MES) for selected predictors (such as children, preferences
and prospective gains and losses). Table 3 shows that having more children below school age
is a significant constraint that considerably increases the probability of being a non-working
mother if a woman is a single mother with no higher education. The child constraint seems
less strong for higher-educated women.
Table 4 shows that people respond more to a decrease in financial losses than an increase
in financial gains. This finding is in line with prospect theory prediction that people strongly
prefer avoiding losses to acquiring gains and it has the following implication. Some at-home
women would be financially better off if employed. However, some others would face
prospective losses. These losses could arise either because these women expect to be in a low-
paid job or because they expect to work for a few hours. A reduction of these losses (such as a
better-paid job or the possibility of working longer hours) would represent for these at-home
females a bigger incentive into employment than an equivalent increase in gain would
represent for other at-home females.

Having Not having Not having higher

children higher education and being a Having higher Having higher education
aged education single parent education and being a single parent

0–2
Dy/dx 0.11 (8.25) 0.14 (7.32) 0.10 (7.99) 0.12 (6.99)
(z value)
Table 3. 3–4
Average marginal Dy/dx 0.06 (4.52) 0.08 (4.32) 0.06 (4.51) 0.07 (4.27)
effects of children’s age (z value)
on the probability of 5–12
being non-working Dy/dx 0.03 (3.80) 0.03 (3.74) 0.02 (3.75) 0.03 (3.68)
carers (z value)

Prospective loss Prospective loss Prospective loss Prospective gain Prospective gain
at
3.73 at
2.44 at
1.48 at 1.27 of 2.96
(10th percentile) (25th Percentile) (50th Percentile) (75th Percentile) (90th Percentile)
Dy/dx Dy/dx Dy/dx Dy/dx Dy/dx

Controlling factors
Table 4. Emotionally
0.08
0.13
0.15
0.06
0.05
Average marginal detached
effects of prospective attitude
financial losses or Not
0.15
0.16
0.13
0.03
0.02
gains on the emotionally
probability of being detached
non-working carers attitude
 The asymmetry of the reaction to losses and gains depends on two factors: personal Alleviating
attitude and the magnitude of losses and gains. Among the at home cares, the job-ambitious childcare
women, when compared to the non-job ambitious ones, display a stronger reaction to high
losses (in the 10th and 25th percentile of the distribution) and a much lower reaction to gains.
constraint for
In the domain of gains, this last feature can be a trait of those non-working mothers who have women
taken maternity leave and plan to return to work in the future. In this scenario, additional
gains into employment do not stimulate strong reactions because these women prefer to be
temporarily at home. On the other hand, the non-working and more emotionally detached 1253
carers are more reactive to an increase in the financial gain of switching into working,
possibly because their status is less due to choices and more due to lack of opportunities. In
the domain of losses, the opposite occurs: those at-home carers with job ambitions reacts to
the same reduction of financial losses more than the at-home ones more emotionally
detached would.
Therefore, financial incentives matter but they interact with personal attitudes and
ambitions. A policy that accounts for these personal drivers may, therefore, be more
impactful. The policy should aim to engage and motivate the more detached to reinforce the
effect of the financial incentives of a switch into employment, particularly when the switch
may lead to a loss of income. At the same time, the policy should help the transition back into
work when the non-working status is a temporary choice following the maternity experience,
and women are motivated and engaged with the labor market.

Simulations of policy scenarios

Building on the model above, we generate policy scenarios to consider the female labor
market constraints and identify female-focused incentives to support mothers in the return to
work after the COVID she-session and home-schooling impact. We used the probit estimates
to perform simulations of welfare policies to gain insights into what could nudge non-
working mothers into participation. We devised three simple policies (indicated as cut, benefit
and child policy) and two combinations (called Mix1 and Mix2). These policies represent a
simplified version of reality.
The benefits policy could be viewed as the New Labor’s attempt to make work pay through
the tax credits system. This policy would provide an additional £100 per week to the labor
income of those working females with children aged 0 to 12 who are single parents or whose
partner is not employed. It provides a “positive” incentive and resources to reward
employment status. The cut policy could reflect the coalition government’s attempts to reduce
the dependence on welfare. It creates a negative incentive that would prompt a change in the
status quo of those non-working female with children aged 0 to 12, and who are single parents
or with a non-working partner if they wanted to avoid a weekly loss of £100 of the non-labor
earnings.
The child benefit policy is about alleviating the childcare constraint. It is a “positive”
policy, tailored to working females with children aged 0 to 15 and with a labor income below
£26,000. The policy is more “personal” because it provides resources according to the number
of children and their age [4]. The childcare policies of New Labor’s Sure Start of and Working
Families tax credits childcare components are real work examples of this child-based
simulation and form the basis of the idea behind this simulation. The policy Mix2 is the mix of
the child policy and the cut policy. The reason for devising a mixed policy is to reduce the cost
of the policy for the government, therefore making it more sustainable.
These simulations are relevant as the debate about the most effective economic recovery
approach from COVID-19 heightens. Because we use 2009 data, right after the financial crises,
these simulations provide us with a baseline to test the potential effect of repeating past
mistakes facing a weakening. Before presenting our simulation, it is important to stress that
IJSE the two incentive policies, benefit and child, are not directly comparable because of the
48,9 following two reasons: first, the child benefit policy “falls” on a larger group of women, of
whom the females eligible for the benefits policy are a subset; second, they involve different
amounts of resources. However, the percentages of non-working women eligible for the
benefit policy, and hence for the child policy, and gain from either policies in switching status,
are not dissimilar (50% for benefit and 43% for child), meaning that for some non-working
women the two policies did not differ much. Despite this similarity, the more meaningful
1254 comparisons are between benefit and cut policies and their mix (Mix1) (because they fall on
the same group of women and are of the same amount) and the child and Mix2 policies.
Table 5 reports the overall results of the simulations and the baseline scenario (no policy)
and the average probability of the entire sample and of the sub-sample of mothers (47% of the
sample), for whom policies are designed, independently of the actual market labor status of
the respondents. Our results are in line with Blundell et al. (2016), who, using the labor Force
Survey, find tax credits to be welfare-enhancing for women in the UK, especially mothers.
Three main observations can be drawn from the table: first, policies affect only minimally
the average probability of being unemployed, but they affect the average probability of the
other two categories; second, monetary incentives affect the probability of being an at-home
more than monetary punishments of an equivalent amount do, as shown by the slightly
higher average percentage of being at-home carers under the cut policy relative to the benefit
policy. Despite the small difference between benefit and cut policies, these two policies can
potentially produce very different effects on child poverty, an aspect that is not included in
the analysis, but that must be considered in comparing these policies. Third, mixed policies
always produce stronger results because they combine the effects of policies working in the
same direction [5].
To better understand the effects of policies, in the rest of the paper, we focus on mothers, as
they are the females to whom policies are directed, and we control for some specific factors.
Mothers who are more emotionally detached from the labor market (Figure 1), or with young
children aged 0–4 (Figure 2) have a higher probability of being at-home carers and a higher
responsiveness to policy, than mothers with opposite characteristics.
In Figure 3 we consider only mothers who are currently at-home carers. The figure
illustrates, for these women, incentives work better than punishments in prompting them
closer to the labor market and into employment. The child policy and Mix2 are very effective
in altering probabilities, making employment more likely than keeping the status quo.

Sample 5 1,657 (mothers with child(ren) aged 0–

Sample 5 3,526 15)
Non- Non-
working working Unemployed Employed
carers Unemployed Employed mothers mothers mothers

Baseline 0.154 0.029 0.818 0.231 0.025 0.744

Cut (C) 0.152 0.029 0.819 0.229 0.025 0.746
(£5,200)
Benefit (B) 0.150 0.029 0.821 0.224 0.026 0.750
(£5,200)
Mix 1 0.149 0.029 0.822 0.222 0.026 0.752
(C þ B)
Table 5. Child (CH) 0.122 0.030 0.848 0.164 0.028 0.809
Average probabilities: Mix 2 0.120 0.030 0.849 0.162 0.028 0.811
simulations (CH þ C)
 Emotionally Detached Not Emotionally Detached Alleviating
childcare
0.51

0.50
constraint for

0.49

0.49
women

0.38

0.38
1255
0.15

0.15

0.14

0.14

0.10

0.10
Figure 1.
Average probability of
being non-working
mothers, controlling
for personal attitude
BASELINE CUT BENEFIT MIX 1 CHILD MIX 2

Child 0-4 No Child 0-4

0.36

0.36

0.35

0.35

0.23

0.23
0.17

0.17

0.17

0.17

0.13

0.13
Figure 2.
Average probability of
being non-working
mothers, controlling
for young children
(0–4)
BASELINE CUT BENEFIT MIX 1 CHILD MIX 2

We control for some additional personal factors such as the number and age of children, labor
market attitude and prospective gains and losses and education (Figures 4–7), and we focus
only on the child policy, as this is the one effective in alleviating the children constraint [6].
Figure 4 reveals that the at-home mothers with pre-school age children (particularly for the
three to four years old age group) benefit the most from the policy; the weakest effect of the
child policy is shown by the category of carers with older children (aged 12 to 18). This result
is not surprising because older children of working age would represent a less stringent
parenting constraint than a younger child. What is surprising instead is that the non-working
mothers of older children show the highest probability of keeping their status quo. Two
factors may explain this position: either a generational reason or the difficulty of returning to
the labor market once children have grown.
Figure 5 combines information about parenting constraints and personal labor market
attitudes. Some observations can be made. First, in the absence of a policy, mothers with job
ambitions do not seem to be particularly constrained by having younger or older children.
The baseline figures show that valuing a rewarding job almost annul the young children’s
IJSE non-working carer unemployed employed
48,9

0.58
0.58
0.57

0.57

0.56

0.55

0.40
0.40
0.38
0.38

0.37

0.37
1256

0.05
0.05
Figure 3.

0.05
0.05
0.04
0.04

Conditional
probabilities of non-
working mothers
BASELINE CUT BENEFIT MIX 1 CHILD MIX 2

Baseline Child policy

0.53

0.53
0.50

0.49

0.31
0.30

Figure 4.
Conditional
probabilities of non-
working mothers,
controlling for
children’s age
C HILDR EN 1 2 -1 8 ONLY C HILDR EN 5 -1 1 ONLY C HILDR EN 0 -4 ONLY

constraint, as all mothers show a similar conditional probability of keeping the status quo;
however, under the child policy the situation changes. The mothers of pre-school children are
those most affected by the intervention, and they see their probability of keeping the status
quo halved by the policy.
Second, for mothers without job ambitions the situation is quite different and having pre-
school children represents a bigger constraint than not having them. These mothers show the
highest probability of keeping their status quo in the absence of policy. Overall, the group
mostly affected by the child policy is the one of mothers of pre-school children with positive
job ambition attitude, which may reveal a willingness to engage with the labor market. The
least reactive group is the group of mothers of older children and detached preferences (this is
the group most challenging to engage in the labor market because as already pointed out,
they may be “discouraged” non-working female who may have found it difficult to re-engage
with the labor market after children have grown).
Figure 6 illustrates the probabilities of at-home mothers with different job market
attitudes, facing different sizes of prospective gains and losses in changing the status quo
 Children 12-18 Children 5-11 Children 0-4 Alleviating
childcare
0.68
0.65
0.64

constraint for

0.57
women

0.46
0.44

0.41
0.40

0.37

0.32
1257

0.19

0.18
Figure 5.
Conditional
probabilities of non-
working mothers,
controlling for job
BA S E L I N E CHILD POLICY BA S E L I N E CHILD POLICY ambitions and
children’s age
E M O TI O N A L L Y D E TA C H E D N O T E M O TI O N A L L Y D E TA C H E D

1st quartile 2nd quartile 3rd quartile 4th quartile

0.95
0.85
0.75
0.65
0.55
0.45
Figure 6.
0.35 Conditional
probabilities of non-
0.25 working mothers,
0.15 controlling for job
ambitions and
0.05 prospective gains and/
B AS E LIN E C HILD P OLIC Y B AS E LINE C HILD P OLIC Y or losses of changing
the status quo
EM OTION ALLY DETAC HED NOT EM OTION ALLY DETAC HE D

under the no policy scenario. The first two quartiles include only losses; the third quartile
includes both losses and gains, the last quartile only gains. The effects of the child policy are
much stronger in the first two quartiles when the policy reduces losses (or changes losses into
gains) than when it adds extra gains to existing ones. This result is even more pronounced in
the presence of job market ambitions.
The last figure (Figure 7) illustrates the combined effect of education and having children
aged 0–12.
The graph prompts three observations. First, under any scenario, the lowest probability of
being at-home mothers is associated with highly educated mothers of older children. On the
other hand, the highest probability is associated with the non-highly educated mothers of
older children, who may find it more difficult or less financially rewarding to re-enter the
market after the children have grown.
The second observation is that, under the baseline scenario, having or not having young
children make only a small difference for the non-highly educated at-home mothers. The
opposite occurs to the highly educated ones, for whom having young children represents a
IJSE Baseline Child Policy
48,9 0.70

0.60

0.50

1258 0.40

0.30
Figure 7. 0.20
Conditional
probabilities of non- 0.10
working mothers,
controlling for
0.00
education and age of C HIL D R E N 0 - 1 2 N O C HILD R E N 0 - 1 2 C HIL D R E N 0 - 1 2 N O C HILD R E N 0 - 1 2
children
N O HIG HE R E D UC A T I O N HIG H E R E D UC A T IO N

crucial constraint that doubles their probability of being at-home compared to the case of
highly educated mothers without young children.
The third observation is that the child policy helps to alleviate the “young children”
constraint. It seems to prompt the highly educated at-home mothers to reconsider the returns
on their educational investment and the opportunity cost of slower career progression. And it
seems to help the low-skilled ones by making it worth to accept a low-paid job.
Overall, the child policy appears to achieve the following two things. First, by
“compensating” for the lack of higher education, it could help “align” the less educated
mothers more closely with the highly educated groups. Second, by reducing the “young child”
constraint, it could help close the gap created by the children’s age within the group of the
more educated mothers.

Policy implications and conclusions

Motherhood creates a significant economic disruption to female labor participation and
women’s careers. Nurturing female talent is paramount if we aim to be an economically
competitive nation and a gender unbiased society. This need is especially real at times of
economic shocks, such as the financial crisis in 2009 and the significantly worse impact of the
global economic shock of COVID-19 as the impact on the labor market for mothers has been
particularly affected by the types of jobs impacted in the she-session, the amplification of the
impact of childcare due to home schooling and job protection policies that have been more
protective of jobs for men than women Francis-Devine et al. (2021).

Our key findings are:

(1) Prospective financial gains incentivize a non-working mother and unemployed
females to become employed, while prospective financial losses discourage a change
of the status quo. These effects are asymmetric, and the reaction to an economic loss is
bigger than the reaction to an equivalent economic gain.
 (2) Given these responses to prospective financial gains and losses, policies that support Alleviating
the financial costs of returning the labor market, such as in work benefits and childcare
childcare subsidies, are more effective than benefit cuts for mothers.
constraint for
Progress for mothers was made, especially in the spell 1997–2010, when the New Labor women
Government Policies supported women through the practicalities of motherhood. Many of
these supports were lost in the austerity period 2010–2020. Therefore, the economic recovery
from COVID-19 for female employment needs more focus than in 2009, given the depth of the 1259
global recession to come and given the lower level of state support for women to engage in the
labor market in the post-austerity period. More extended and more generous maternity leave,
flexible working hours and part-time schemes are now available, and the UK government has
introduced a paternity leave programme to share parental child-rearing responsibility. Many
women, however, do not seem to benefit from these facilities. Fully, and more “targeted”
interventions are needed. For instance, for the higher-skilled women who can afford
expensive childcare, the obstacle in the advancement of their post-motherhood career often
resides in the corporate stigmatization of flexible and part-time work, which is perceived as
lacking ambition and commitment. Encouraging and firmly nudging fathers into paternity
leave (Chile, Italy and Portugal have compulsory paternity leave) may eventually lead to
altering these perceptions and correct managers’ bias against advancing and promoting
women in their careers.
Other schemes can be envisaged to help women back after a mid-career break. Wall Street
and India have pioneered “returnship” schemes to bring experienced women back into the
workforce via paid programs, conceived as a combination of a mid-career internship and a
fixed contract. Another initiative to put women on a par with men across higher-skilled
careers is to pair women who have taken a career break with more experienced mentors.
However, for the lone parents and lower-paid women, paternity leave and “returnships” or
“mentorships” may not be viable options. For them, childcare affordability is paramount.
With the return to school and the end of furlough scheme in the UK, this provides an
opportunity for employers to co-design mother-friendly return to work policies (or work from
home policies) to maintain their valued workers.
Failing to address the cost of childcare is a severe policy shortcoming that affects both
women’s and men’s working opportunities and, most crucially, children’s development [7].
Childcare costs more in the UK than in any other European country except for Switzerland
and Ireland. The British government has shown an awareness of the problem in doubling the
hours, from 15 to 30, of free nursery care to eligible working parents of children aged three or
four. More can be done in terms of public policy to increase access to affordable childcare
while securing its quality. Restructuring the tax system to allow families to claim tax credits
against the cost of childcare and tackle the inadequate supply of provision around the UK
could help to ameliorate the issue of access to childcare.
The UK responses to previous spells of mass unemployment have mainly focused on the
number of people unemployed and reserved marginal attention to its composition and people
hidden in other worklessness statuses. The “We are all in together” promise should be kept
better than in the past, and the design of current and future policies should recognize and
address specific gender needs. The COVID-19 crisis has made us more aware of the
challenges of juggling professional and parental roles, and the months of lockdown have
demonstrated to which extent the economy relies on unpaid care, an aspect that is ignored in
economic modeling and policymaking. At this time, with governments around the world
combating a global economic shock, it is vital to present evidence on possible economic
recovery plans that are focus on women’s employment and childcare cost support. Our results
show that gendered policies can support female employment even at difficult times if
policymakers design these policies with women in mind.
IJSE Notes
48,9 1. The term “she-session” has been used to describe the COVID induced recessions, which differs from
the 1990 and 2000s recessions because it hits female-dominated sectors.
2. Because our focus is on policy, we omit the discussion of the results of the switching model. This
model has also been estimated to check for the impact of part-time working, considering both those
working under 20 h and those working 20–35 h.
1260 3. Following the BE approach, the variables Prospectpos and Prospectneg are arguments of an S-
shaped value function that allows for diminishing sensitivity to losses and gains by including linear
and non-linear term.
4. The policy would provide a weekly benefit of £250 for any child aged (0–2); £100 for any child aged
3–5; £25 for any child aged 5–11; £10 for any child aged 12–15.
5. We simulated different interventions (cuts and benefits of £2,600, cuts, and benefits of £10,400). We
still found a higher sensitivity to benefits than to cuts. More substantial interventions would
progressively (but not drastically) reduce the average probabilities of being at-home carers and
increase the probability of becoming labor market active.
6. The purpose of the exercise of including benefit and cut policies was to show that people react to
incentives more than to punishment of the same size.
7. In Europe, the interventions of the European Structural and Investment Funds (ESIF), European
Social Fund (ESF) and European Regional Development Fund (ERDF), successfully increased the
places in childcare facilities and helped reconcile work and family life.

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IJSE Appendix
48,9

Frequency WITHIN each age group Young 21–24 Mature 25–49 Old 50–64 Total
1262 Non-working carers 34 (16%) 393 (16%) 135 (14%) 562 (16%)
Unemployed 16 (8%) 65 (3%) 21 (2%) 102 (3%)
Employed 159 (76%) 1936 (81%) 792 (84%) 2,887 (81%)
Total 209 (100%) 2,394 (100%) 948 (100%) 3,551 (100%)

Frequency ACROSS age groups Young 21–24 Mature 25–49 Old 50–64 Total

Carers 34 (6%) 393 (70%) 135 (24%) 562 (100%)

Unemployed 16 (16%) 65 (64%) 21 (20%) 102 (100%)
Table A1. Employed 159 (6%) 1936 (67%) 792 (27%) 2,887 (100%)
Sample composition Total 209 (6%) 2,394 (67%) 948 (27%) 3,551 (100%)

Decision
Regime 1 Regime 2 function
Number of obs. 5 3,551; Wald χ 2(15) 5 318.74 Log Non-labor Labor Being not
likelihood 5 –6561.39; Prob > χ 2 5 0.00 income income employed

Labor market variables

Age 21–24 0 0 0
Age 50–64
2.19(***) 0 0
BME 0
0.34(**) 0
Health limiting condition 0 – 0
Responsible carer (working or non-working) 1.55(***)
0.24(***) 0
Mum not at work 0.36(*)
0.10(**)
0.20(**)
Partner employed
1.67(***) – 0
Having child(ren) (age 0–2) – – 1.10(***)
Having chil(dren) (age 3–4) – – 0.36(***)
Having chil(dren) (age 5–11); (12–15); (16–18) 0 0 0
GCSE education 0 0.26(***) 0
A level education 0 0.27(***) 0
Higher education 0 0.63(***)
0.28(*)
Employment spells – 1.93(***)
2.48(***)
Squared employment spells –
0.97(***) 0.42(***)
Unemployment spells
0.86(***)
0.01(*) 1.56(***)
Disability benefits 1.27(***)
0.54(***) 0
Maintenance – 0.21(**) 0
Job with pension scheme – 0.60(***)
0.53(***)
Job with promotion opportunities – 0.08(*)
0.31(**)
Log annual income from investment
0.21(***) 0.03(***) 0
Constant 7.50(***) 8.15(***)
0.70(*)
Behavioral variables/satisfaction
Gain in confidence – – 0
Table A2.
Loss in confidence – – 0.07(**)
Endogenous switching
regime results
(continued )
 Decision
Alleviating
Regime 1 Regime 2 function childcare
Number of obs. 5 3,551; Wald χ 2(15) 5 318.74 Log Non-labor Labor Being not constraint for
likelihood 5 –6561.39; Prob > χ 2 5 0.00 income income employed women
Conscientious 0 0 0
Extravert –
0.11(***) 0.12(*)
Risk – –
0.04(***) 1263
Autonomy – – 0.13(**)
Satisfaction with wealth – –
0.04(**)
Social relations/environment/interaction
Local worklessness ≥ 20% – – 1.05(***)
Proportion of network not employed 0.71(**) – 0
Proportion of network employed – 0.31(***) 0
Conform to a non-working network – – 0.58(***)
Deviate from a working network – – 0.49(***)
Capabilities – –
0.10(**)
Self-selection
Rho_1 5
0.16 (**); Rho 2 5 0.72 (***)
Note(s): A zero coefficient means no statistically significant; (***) 5 1% significance; (**) 5 5% significance;
(*) 5 10% significance; no entry means that the variable was not included in the equation Table A2.

Corresponding author
Gabriella Cagliesi can be contacted at: m.g.cagliesi@sussex.ac.uk

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