The dismal US jobs numbers and GDP growth have got me thinking about Norway. Recently the New York Times asserted that the country’s prosperity is fueled by the number of working women, 7% more than in the United States and 10% more than in the rest of Europe. Norway is still seeing negative GDP growth, but the depths of their despair are significantly more shallow than in the US and the rest of Europe.
It’s an interesting hypothesis – that enacting policy that allows women to more fully enter and maintain presence in the workforce leads to greater labor supply, output and tax revenue. And from a macroeconomic perspective, it makes sense. If gross domestic product is a function of productivity, labor supply, and capital, an influx of qualified women would increase at least two of those three factors, bumping up GDP.
There’s reason to think that this effect might be even more pronounced in the US. Most economists see GDP growth in mature economies as stemming primarily from increases in productivity, including better technology, more highly skilled workers and better management practices. Women now earn nearly 60% of bachelor’s and master’s degrees, roughly 50% of professional degrees and 55% of PhDs, suggesting that in the coming years women will be a more skilled labor pool. If they haven’t already, the Department of Labor projects that women will make up more than 50% of the workforce in the near future, meaning that they are likely to have more experience in a variety of jobs.
On the flip side, Norway’s matrix of policies in this area is complex and comprehensive, including maternity/paternity leave, quotas in the boardroom and affordable childcare among many others. Political will for this kind of legislation has been weak in the US, even among women who should know better.
I suspect, however, that we would not have to enact the entire suite of Norwegian policies to fuel GDP growth with female capital. I’m not a fan of quotas, for example. A fourteen-month maternity leave is a ridiculous thing to ask of companies, and most would hire significantly fewer women (as has happened in other parts of Europe). And part-time work is only an option for women who don’t mind parking their career for a few years; a lot of us want the C-suite.
So what would work in the US? Great, affordable childcare. (Added bonus, this too would boost long-run productivity.) Incentivized and promoted paternity leave that would equalize childcare and housework in marriages. Equal pay for equal work that would keep women in the workforce. Corporate environments where politics and bad management don’t kill the joy of challenging, meaningful work.
Norway’s solution doesn’t fit the US; we have different challenges and opportunities when it comes to women and work. But we can achieve the same result by investing in women, and especially working mothers: greater economic success for everyone.
Interesting post! Here’s my top 3 wishlist for policy changes that would help keep more mothers in the workforce:
More help on day care for families for whom it is a big enough chunk of their income to be an issue (i.e., probably not people like me- do a sliding scale so that everyone can afford the great day care that I can afford).
Bumping paid maternity leave up to at least 3 months- 6 weeks is almost criminal, particularly for people like me who don’t luck out in the baby sleeps sweepstakes. I was hardly able to form coherent sentences at 6 weeks postpartum with my first kid (the super bad sleeper). Luckily, I had arranged for 3 months off. Also, 6 weeks is a major, major growth spurt for breastfed babies. The transition to pumping is hard enough without putting it right at the time when the baby would probably be nursing non-stop. Three months is only marginally better, really. I credit the fact that I went back part time for one month for saving my ability to keep breastfeeding (which was important to me).
Better sick leave policies. Definitely make sure that everyone gets some paid time off so that a sick kid isn’t a financial disaster for people on the lower end of the pay scale. But things also suck for a lot of folks higher up the food chain. My current job is the first I’ve ever had that gives me actual sick leave- and it only gives 2 days. Everything else is “paid time off”. My husband is in the same boat. This means that we usually have to take time off without pay if we want to take a vacation of more than a week, because all of our PTO has gone to sick leave. I see this getting better as my youngest gets old enough to entertain herself a bit, allowing us to work from home when she’s sick.
The trick to Norway’s long maternity leave is the strong incentive to paternity leave, as the 46 week paid leave is split between the parent, including 12 weeks paternity leave that will be lost unless used. This means that while a potential mother will mean a loss to the company, so will the potential father.