Should We Encourage Women to Work?

The Becker-Posner blog has an interesting discussion (here and here) about childcare subsidies and government sponsored work leave. Both Becker and Posner agree that the government should not be involved in the child care market, but, at most, should provide vouchers for low-income families to use in the private child care market.

They also concur on the point that the government should not sponsor year long work leaves for parents because the underlying reason for the government to encourage such leaves (it will promote childbearing) does not lead to the conclusion that the government should help parents stay home with their children; rather the government should provide allowances for each child after a certain point (which is usually the second child on). Israel used to have such a law, but cut back on the allowance because they felt the government should not be promoting large families where the parents are incapable of supporting their children.

The most interesting statement in the discussion is Posner's remark that,

"[f]rom an economic standpoint, women should not be encouraged to enter the labor market unless the social value of their output in that market is greater than the social value of their household production, importantly including their contribution as mothers to their children's human capital (broadly defined)."

Posner is unsure whether that is the case (the feminist would criticize him for not asking the same question about men, but Posner the pragmatist realizes that the question is not applicable to men because they work at a much higher rate and are not likely to assume the dominant domestic role anytime soon) . Hence he would not support measures that encourage women to enter the workforce.

I'm not well-versed in the sociological literature but intuitively it would seem that women (or men) staying home with their children would be beneficial for the child. Oddly, this statement is disputed. A recent book by Mary Eberstadt, however, argued that many of the medical, social and psychological problems facing our children are results of "absent" parents, which includes deadbeat dads and moms who work and force their kids into day care.

I'm not sure I'd go as far as Eberstadt, but it's hard to deny that having a parent raise the chid is beneficial. But is it substantially beneficial to the extent that we should discourage mothers from entering the market or fail to provide incentives for them to enter it? A difficult question no doubt. I'd argue that we shouldn't discourage it, but we shouldn't encourage it either.

I'm not sure there's an answer for women in general. In individual cases it's certainly better for the mother to stay home because she will better serve society by raising her children full-time. In other cases society is better off with the mother in the workforce. The question has to take into account many factors, including the aptitude (both business and maternal) of the woman, the willingness of her husband to share the domestic duties, the availability of other family members to raise the child (grandmothers), etc.

Since the question is pretty much unresolved it would be better for the government to stay out of the debate and let the market work itself out. Without government encouragement some women will choose to enter the workforce, some will stay home, and some will do both (balance their schedule so they can spend as much time with their children as possible). That's probably a good thing.