OECD Recommends Portugal Strengthen Support for Working Parents in Low-Income Households


25/10/2004 - Mark Pearson, Head of the OECD’s Social Policy Division, together with Maria Cardoso Aguas, Portuguese Secretary of State for Social Affairs, will release Babies and Bosses, a review of Portugal’s policies to support parents in their choices of work and childcare, at a news conference at 11:00 on Thursday 28 October in the Noble Hall of the Ministry of Social Security, Praça de Londres, in Lisbon.

In Portugal, a country with a relatively wide income distribution and a large low-wage sector, there is a high incidence of working poverty, especially among single-earner couples. Almost two out of three Portuguese women are in paid work, and the vast majority (85%) have a full-time job. The high level of full-time female employment in Portugal implies a greater need for full-time day-care. However, many women regard their working hours as a major barrier to spending more time with their children, or to having larger families – Portugal’s fertility rate is low at 1.5 children per woman. 

The OECD’s Babies and Bosses contends that the Portuguese government will eventually have to increase investment in families.   In the short-term, as the scope for increasing public expenditure on family policies is limited, it is vital that available funding is well-targeted and efficient.  For example, a rapid expansion of childcare investment would be costly, so the initial priority should be to enable parents to choose the type of childcare they prefer, including parental care. To support working parents and their children, the government should make better use of the existing childcare system, and increase the financial incentives for low-income families to work. This could be done through higher child allowances or tax reductions for working families.

The government should direct public funds for childcare towards parents rather than providers. This would allow parents to choose the number of hours and type of childcare they need and make better use of the existing childcare capacity. Giving money directly to day-care users will increase demand for the service and a system of registering childminders should be linked to such payments as a way of ensuring good-quality care. The amount of support families receive should be income-related so that limited public resources can be targeted to families most in need.

Portuguese work-family policy emphasises gender equity, and some initiatives are relatively successful; the 15-day paid father quota, introduced in 2000, was used by 30% to 40% of eligible fathers in 2003. Nevertheless, the father’s role in parental care remains limited. Employers could help both parents to square their work and family responsibilities by offering more flexible work hours and by more readily accepting that both parents can take time off to care for children. The government could encourage this by providing financial support to enterprises that participate in a “Work and Family Audit” and that are supportive of their employees’ family obligations. 
Portugal provides entitlements which allow parents to work fewer hours and spend more time with their children, but most people cannot afford the equivalent loss of earnings. To improve their work/life balance, Portuguese parents will need higher financial returns from working part-time. This could include the introduction of an in-work benefit, linking such support to use of childcare, and reforming the current childcare fee structure so that parents pay according to the number of hours of childcare they use.

Based on its review, the OECD’s Babies and Bosses suggests the following policy recommendations to improve the balance of work and family life in Portugal:

  • Reduce unnecessary barriers to part-time employment by changing the childcare fee structure (and subsidies): parental fees should reflect the number of hours for which childcare services are used.
  • Reinvigorate a recent pilot project in the Algarve region that provided childcare support directly to parents. It encouraged new clients to use childcare facilities and gave low-income households greater access to private centres. Public support should encompass the (presently largely informal) family day-care sector, while quality can be assured by making support conditional on the use of licensed care facilities.
  • Strengthen support for low-income families without harming work incentives. This could be done  through  the tax system (e.g. through an employment-conditional refundable tax credit for low-income groups) or the benefit system (e.g. through higher child allowance payments for low-income working families).
  • Encourage family-friendly workplaces by subsidising employers who provide employees with tailored advice on family-friendly policy practices, and ensure long-term enterprise commitment through regular assessment or audits.
  • Integrate the programmes on child-related leave and part-time work entitlements as much as possible since the different rules contribute to uncertainty among potential users and reduce potential take-up.
  • Without additional spending, allow for greater income spreading of the maternity pay entitlement, including to the period of (part-time) parental leave, to increase choice for parents with very young children.

To obtain a copy of the book, which is under embargo until Tuesday 28 October, journalists are invited to contact the Media Relations Division (tel. (33) 1 4524 9700). For further information journalists are invited to contact Willem Adema, Project Manager of the OECD family-friendly policy reviews (Tel. (33) 1 4524 1557) or Mark Pearson (Tel. 33 1 4524 9269).

For furher information on family-friendly policies


Related Documents