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More research for my interview. This is actually based on a blog post I had half-written 2 years ago but never got around to posting.

  • Childcare
    • I think reform of childcare will be one of the more important microeconomic reforms our generation can make. It will have more productivity gains than introducing labour market deregulation or any other policy I can think of
    • When women began entering the workforce, economies right around the world got a massive boost to their economic growth due to a flood of new and intelligent workers. The productivity gains were enormous, from transferring smart women into jobs that made use of their intelligence.
    • Now, women’s pay is still less than those of comparable men’s jobs. Part of this is due to good old fashioned discrimination – pay levels at entry-level graduate jobs are not equal – but a big part is that women are forced to choose between being carers and careers.
    • Some statistics:
      • 40% of professional women in Switzerland are childless
      • 93% of MBAs wanted to return to work after leaving work to raise children, but only 40% returned to full time jobs of any kind.
    • Paid maternity leave is one solution, and one which Tony Abbott proposed (6 months, compulsory); e.g. Austria gives up to 3 years paid maternity leave
      • But it is very expensive and I think it may not work. You are still forcing businesses to go without their employees for three years. Who makes hiring decisions three years in advance? We all recognise that skills atrophy during unemployment, which is essentially what paid maternity leave is
      • It actively discourages firms from hiring women at the graduate entry level, knowing that in 5 years time, she has a right for 3 years of paid maternity
      • It’s a blanket solution that cannot be adjusted for particular industry conditions
    • I think childcare and flexi-time is a more tailored solution, perhaps in combination with maternity leave
      • There are problems with policy implementation. For example, government subsidies for child care centres caused all the distortions so well-described by economic theory.
        • Just as subsidies for retirement villages created a nirvana for A Current Affair and Today Tonight, low quality child care centres appeared everywhere.
        • Those child care centres weren’t located in areas where they were needed – some childcare centres competed in the same areas; other areas had no child care centres. And many of these centres were badly run- just look at ABC learning.
        • Evidence shows that exposure to low-quality child care is bad for children, but they can thrive in exposure to high quality childcare.
      • It may be that state intervention is not required. Grandparents may be the solution, as they are in many Asian families
      • Flexi-time is a buzzword, and one that will be implemented by firms with pressure from employees. But there are some green shoots, like ‘legal directors’ as an alternative pathway to partnership in law firms.
        • Other innovative solutions, like having shorter semester breaks for schools and having longer school hours instead, as many US Charter Schools do
    • Another key goal is to remove the stigma from motherhood. If a woman takes time off work for children or wants flexitime, people will think she is non-career orientated. I think a key solution is to introduce paid paternity leave, with even stronger financial incentives for husbands to work.
      • It makes economic sense. In some cases, the mother may be more competent than the husband career-wise. It should be him that undergoes the skill atrophy associated with SR unemployment. But this isn’t happening because of cultural barriers
      • Having non-transferable parental leave for fathers has been shown to work in Nordic countries, but then again, so have high taxes
    • There are other benefits to equal participation. Some argue women are inherently better than men at some tasks, like communication whilst men are better entrepreneurs. If that is true and not an over-generalisation, then having men and women in your economy is a form of risk diversification. If an event, like the GFC, disproportionately affects men then you have women there to keep the economy growing strong (and vice versa – men provide upwards growth).
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