Economists love their economic models and their footnote citations just as much as politicians love it when economists ply their tools of the trade in support of these politicians’ economic policies. In this regard, Sen. Bernie Sanders is no different than Sen. Marco Rubio, and former Secretary of State Hillary Clinton no different than former Gov. Jeb Bush. Yet fact-based, data-driven economic modeling based on the best available evidence often misses the mark due to seemingly obvious missing factors.
Take the still-simmering internecine battle among left-leaning economists over Senator Sanders’ economic policy proposals—which University of Massachusetts Amherst economist Gerald Friedman models, showing that U.S. economic growth would top 5 percent if he becomes president and if he is able to implement his entire platform immediately. Setting aside all of the politically unknowable “ifs” in that last sentence, Friedman’s model tells us that the Sanders growth machine will be powered by a swiftly rising employment rate—the share of the U.S. population with a job—up to 65 percent by 2026, 8 percentage points higher than current forecasts by the Congressional Budget Office. These are big employment gains.
In support of this projection, Friedman argues in footnote 22 of his paper that women’s labor force participation will rise because women’s wages will rise after President Sanders signs into law, implements, and enforces the Paycheck Fairness Act, which would reduce discrimination against women workers. Pay is certainly an important reason that women work, but it’s not the only reason that women stay out of the labor market. Research shows that policies such as paid family and medical leave, stable workplace schedules and scheduling flexibility (that works for workers, not just their employers), and, especially, safe, affordable, and enriching child care and elder care boost women’s employment and that of caregivers more generally.
Generations of economists have failed to put the need for care and the effects of that care provided predominantly by women into their labor supply economic models. I cannot make every economist fix their models, but it’s entirely unrealistic—and unjustifiable—to make assumptions about work and time spent in the workforce that ignore the everyday economic realities facing families. Politicians, however, are starting to get what so many economists have missed. Senator Rubio, Secretary Clinton, and Senator Sanders all have policy platforms that include paid family leave, and Secretary Clinton talks a lot about her plans for expanding access to child care.
These policies have demonstrable effects on employment and earnings. Researchers have shown that California’s paid family leave law has increased leave-taking for mothers and fathers and improved mothers’ employment outcomes. Mothers who have access to this new benefit are more likely to return to work after the birth of a child, and when they return to work, they put in more hours at work compared to mothers who did not use paid leave. These outcomes are supported by the fact that leaves are equally available to men and women; because fathers are using their leave, too, this gives mothers the support they need to address work-life conflict. More striking are the labor supply effects of universal child care policies. After Quebec implemented a universal child care program, for example, researchers found that mothers’ labor force participation rose by 13 percent.
This academic and policymaking attention to the issues of work-life conflict in our economy and our society on the presidential campaign trail follows many successes in implementing new policies at the state and local level. Very recently, Vermont’s legislature passed a bill that Gov. Peter Shumlin has expressed support for, giving workers employed more than 18 hours a week the right to earn up to five paid sick days each year (although only three days in the first two years of the law’s implementation). This is the 28th place in the United States to put such a policy in place, following four other states, 21 cities, one county, and the District of Columbia.
Yet, too often, politicians tend to see work-life policy as just another sop to just another interest group: women. (Never mind that we’re the majority of the population.) This is a big mistake. Economists and policymakers alike need to put women’s participation in the economy and in family life at the center of how our economy grows and works now and over time.
To understand what makes the economy grow, we need to know what hinders people from fully engaging in the labor force. Our nation’s inattention to the causes and consequences of work-life conflict is a serious hurdle for many families. Fixing it will require serious research followed by evidence-based policymaking to change how work is done in our society.