THE CHANGING LIFE CYCLE PATTERN IN FEMALE EMPLOYMENT: A COMPARISON OF GERMANY AND THE UK
| Author | Bernd Fitzenberger,Gaby Wunderlich |
| DOI | http://doi.org/10.1111/j.0036-9292.2004.00308.x |
| Date | 01 August 2004 |
| Published date | 01 August 2004 |
THE CHANGING LIFE CYCLE PATTERN
IN FEMALE EMPLOYMENT:
ACOMPARISONOF
GERMANY AND THE UK
Bernd Fitzenberger
n
and Gaby Wunderlich
nn
Abstract
Employment rates of women have been rising but women are often part-time
employed and employment interruptions over the life-cycle are linked to family
formation. This paper analyzes empirically full-time and part-time employment of
different skill groups of women in the UK and West Germany. Patterns of part-
time and full-time employment are different across skill groups and countries. Full-
time employment declines and part-time employment increases with age. Time
trends do not change in a monotonous way across skill groups and they differ by
country. The strong increase in part-time rates in both countries over time can
mainly be attributed to composition effects.
I Intro ductio n
Rising female employment rates are found as a general trend in the
industrialized countries throughout the second half of the last century (Altonji
and Blank, 1999). Nevertheless, this broad statement requires some qualifica-
tions regarding the specific nature of female employment patterns. In contrast to
men, women are disproportionately part-time employed and there exist
distinctive live–cycle patterns both in the timing and the type of female
employment (Blundell and MaCurdy, 1999). Therefore aggregate employment
rates are not a very informative measure of female labour force participation.
According to various contributions in Blossfeld and Hakim (1997), the increase
in female participation rates can be attributed mainly to part-time work in most
European Countries and the US. Furthermore, only the US has exhibited
a steady growth in female employment since the beginning of the century.
European countries have experienced increases in female (part-time) employ-
ment beginning with the 1970s (see Blossfeld and Hakim, 1997; for the US see
Goldin, 1990; Jacobsen, 1998).
n
University of Mannheim and IFS
nn
University of Mannheim
Scottish Journal of Political Economy, Vol. 51, No. 3, August 2004
rScottish Economic Society 2004, Published by Blackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK
and 350 Main Street, Malden, MA 02148, USA
302
The UK and West Germany differ in their labour market institutions,
national labour market policies, and in various labour market developments as
well as in their social and family policy with impact on the labour market. The
latter refers in particular to the availability of child care facilities, length of
school day, taxation of spouses, and flexibility of working times. The tax systems
of the two countries differ in tax units, tax rates, tax brackets and allowances
(see Vermeulen et al., 1995). Moreover, the British tax system was reformed in
1990: Prior to 1990 the income taxes were based on the family income –
following analogous principles as in the German case. Since then, each spouse in
the UK is taxed separately on his or her earned and unearned income (see
Stephens and Ward-Batts, 2001). Social security contributions which have to be
paid by employers and employees are different in Germany and the UK, but in
both countries there exists a contribution free lower earnings limit potentially
creating incentives to work part-time (Vermeulen et al.,1995).Therearefurther
differences regarding wage bargaining institutions. In Germany, while there
is no minimum wage, there is strong industry bargaining with a high degree
of compliance with collective bargaining agreements among employers. In
contrast, multi-employer national agreements collapsed after 1979 in the UK and
union density declined rapidly (Black et al., 1999). This is supposed to be str ongly
related to differences in the distributions of income and wages in both countries
(Giles et al., 1998). Another difference between the countries, regarding parti-
cularly female employment are that activity rates of women are higher and gender
specific wage differentials are declining stronger in Great Britain (OECD, 1988).
Aggregate economic activity rates for all women aged 16–60 started to rise
from 50% in the late 1970s to 60% in the 1990s in West Germany. This
aggregate number summarizes a wealth of different developments among
females. For example, employment rates of young women decreased because of
longer schooling whereas married females increased their employment rates
extraordinarily (Blossfeld and Rohwer, 1997 as well as Franz, 1999). Comparing
the overall economic employment rates of British women aged 16–60 in Burchell
et al. (1997) to the respective numbers for Germany (West) in Blossfeld and
Rohwer (1997), it is clear that overall employment rates of British females are
roughly 10 percentage points (ppoints) higher. Also in the UK, married females
increased their employment rates remarkably. Part-time employment as a share
of total employment has grown in both countries. Between 1973 and 1995 it rose
from 16% to 24% in the UK, and from 10% to 16% in Germany (OECD,
1996). That is, the part-time share in total employment is lower in Germany. The
same is true for the share of part-timers within the group of all working women.
In 1973, 24% of working females have been part-timers in Germany and 39% in
Britain. During the following two decades, this share increased rougly by 10
ppoints in Germany and 5 ppoints in Britain (OECD, 1996). The numbers show
that part-time employment among females has traditionally been more
important in the UK compared to Germany and that the increase in employ-
ment rates can be attributed mostly to an increase in part-time employmentrates
in both countries. The latter effect is stronger for Germany such that the part-
time gap between the two countries has actually been declining.
THE CHANGING LIFE CYCLE PATTERN IN FEMALE EMPLOYMENT 303
rScottish Economic Society 2004
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