Study examines employment situation of women after taking parental leave

In a study published in June 2001, Germany's Institute for Employment Research has analysed the effects of the extension of parental leave entitlement to three years in 1992. The study indicates that the majority of women return to work after parental leave and that these jobs are often adequate and even, in some cases, better than before. Nevertheless, a relatively high proportion of women face unemployment after parental leave. The study also finds that companies are offering improved skills and qualification opportunities to women during parental leave, but that their participation is restricted due to the persistent lack of childcare facilities.

In a recent study, the Institute for Employment Research (Institut für Arbeits- und Berufsforschung, IAB) of the Federal Employment Service (Bundesanstalt für Arbeit) has analysed the effects of the extension of parental leave entitlement to three years in 1992 ('Erziehungsurlaub. Hilfe zur Wiedereingliederung oder Karrierehemmnis?', Gerhard Engelbrech and Maria Jungkunst, IAB Kurzbericht 11, 20June 2001).

The legislation on parental leave, the Federal Childcare Payment and Parental Leave Act (Bundeserziehungsgeldgesetz, BErzGG) was amended from 1 January 1992 , notably to extend leave entitlement to three years and to provide a guarantee that the person taking parental leave must be employed in the same company afterwards. The legislation has since been amended again from 1 January 2001 (DE0007271F).

During 2000, the IAB carried out a survey among 3,000 women in both east and west Germany who had at least one child born after 1991. As the percentage of men who take parental leave is very low, they were not included in the survey. The analysis aimed to assess how the change in the law has affected the period of parental leave taken. In addition, it focused on the maintenance of the skills and qualifications of women during the break from paid employment, and on their subsequent employment situation.

Findings

The aim of the new law was to allow a better reconciliation of paid work and childcare for parents, thereby making a contribution to the improvement of equal opportunities between men and women. After the new regulation came into force, according to the study, a higher percentage of women with small children in west Germany made use of parental leave than in the 1980s. In east and west Germany together, two-thirds of working women who had a first child after 1991 have taken advantage of parental leave after the birth.

While parental leave is very often the only, and probably preferred, solution for women (and the small number of men involved) to care for their child, the longer period of absence from work entails some problems. The study finds that companies fear additional problems concerning personnel management and managers often view investments in so-called 'human capital'- ie recruiting and training employees likely to take parental leave - as too expensive when they take into account processes of 'deskilling' that may occur during parental leave. As far as equal opportunities are concerned, the promotion of individual, privately organised childcare instead of public childcare facilities, which is a side effect of the new law, might be leading to a consolidation of traditional gender roles.

The study indicates that the way companies deal with parental leave has undergone a slight change since the change in the law in terms of maintaining the skills and qualifications of women taking leave. Companies - especially relatively new, expanding, medium-sized companies - try to keep contact with female employees during the break and offer them tailor-made flexible support. This reflects the wish of the company (and the women) to keep the time of absence short.

There is a difference in the behaviour of large companies with a relatively stable employment structure, in that they employ additional workers or take on trainees for the period of parental leave. Furthermore, companies which would have to make dismissals due to economic or structural reasons are happy with the parental leave system, which enables them to save personnel costs when women with children are temporarily out of employment (employees on parental leave are not paid by the employer, but receive a state benefit).

The other key findings of the survey are as follows:

• some six out of 10 west German women and three-quarters of east German women who had a first child and were employed beforehand had returned to their job three years after the birth of the child. While in west Germany, women often change to a part-time job after parental leave, in east Germany they generally continue to work full-time - see the table below;
• despite the existence of the legal right to be re-employed after parental leave (Wiederbeschäftigungsanspruch) a relatively high proportion of women, nevertheless, face unemployment after the statutory leave period - see the table below. One in six women who was employed before the birth of a child was registered as unemployed three years later. The rate was higher in east Germany - at 21% compared with 16% - because of the adverse labour market situation and the fact that east German women have a higher employment orientation (ie they are more likely to be unemployed job-seekers rather than just not employed);
• a large majority of women returned to their previous or equivalent job after parental leave. The study indicates that a change to another job did not, on the whole, lead to a deterioration of their occupational position;
• in general, west German women took parental leave for a longer period than east German women. The study reports that many east German women stated that - in retrospect - they would have extended the period of parental leave;
• overall, internal company offers of part-time work and further training have increased. For women there is still the problem of how to take advantage of these offers, because of the insufficient supply of childcare facilities;
• the new regulation of parental leave in 1992 initially led to a decrease in the employment level of women with very small children in comparison to earlier times. However, the improved framework for returning to their job subsequently allowed an increase in the total number of working women with small children (between the ages of three and six). While in 1986 only 38% of this group was employed, this proportion rose to 50% in 2000; and
• because of changes at company level and individual reasons, the end of parental leave quite often leads to unemployment and therefore means an involuntary break in the professional career of those involved.

Prior and subsequent employment status of women who were employed before the birth of their first child (born between July 1996 and June 1997, n=124), %, east and west Germany

Source: IAB project 3-523, 2000.

Commentary

The study shows that for the majority of women in east and west Germany the employment situation after taking parental leave has not worsened. However, it should be taken into consideration that even if the temporary interruption of employment does not necessarily lead to a break in women's career prospects, the number of women who are unemployed three years after the birth of a child is evidence of the risk. As it is women who primarily make use of parental leave, this risk does not affect men in the same way. The other crucial point is that although increasing numbers of companies seem to be offering skills and qualification measures for women before and during parental leave, this does not prove that they support the idea of equal opportunities and have become 'family-friendly': many companies still do not employ women because of the 'risk' that they might give birth to a child and take advantage of the legal right to parental leave.

The amendments to the law on parental leave which came into force in January 2001 have not changed the duration of parental leave. However, they have introduced some new aspects which might support equal opportunities between men and women, such as an equal division of parental leave between the parents and the opportunity to decide when to make use of the leave. In addition, the opportunities to work part-time during parental leave and the financial compensation have been improved (DE0007271F). Together with the recent new law on part-time work (DE0011293F), this might help to make parental leave more attractive for men and to improve the employment situation for those who take advantage of parental leave. However, it will take some time before experiences with the new provisions have been documented and a study can examine their effects. (Alexandra Scheele, Institute for Economic and Social Research, WSI)