The Gender Paradox of the Nordic Welfare State

The Gender Paradox of the Nordic Welfare State

"Western liberals have a special place in their hearts for the Nordic countries. Their affection is nurtured by a conviction that done correctly, public policy can magically smooth out human contradiction and rid us of difficult tradeoffs. Nowhere is that hope more pronounced than in the Nordic policies related to gender, work, and family life, particularly as they affect women. Work/family, career/children, ambition/breastfeeding, family dinners, and hygge: In these gender-leveling countries, you really can have it all.

Except as the Kurdish-Swedish writer Nima Sanandaji shows in “The Nordic Glass Ceiling,” a paper he wrote for the Cato Institute, that’s just so much wishful thinking. Enthusiasm for women’s balanced lives in Iceland, Norway, Finland, Denmark, and Sweden has rested on cherry-picked numbers, half-truths, and a stubborn denial of unintended consequences...

The Nordic generosity towards young families does appear to increase female labor force participation... Maybe, but—and in policy, as in life, there is always a but—women pay a price. A UCLA study found that merely 11% of managers and professionals in Sweden are women, a number markedly lower than in many other developed economies, including France, the United Kingdom, and Germany. Notably, Iceland—the Nordic country with a smallish welfare state and with by far the shortest parental leave—ranks among the highest in the share of female managers in the world. The U.S. also stands as a rebuke to the common activist claim that generous family leave is a requirement for boosting gender equality. American women have a similarly high ratio of managers and professionals as Iceland, with no federal requirement for paid leave at all.

A growing body of research points to one reason for what many people might think of as counterintuitive findings: lengthy parental leave unintentionally pushes women to lose momentum in developing human capital and workplace seniority and to put more energy into domestic life. One paper quoted by Sanandaji concludes that parental leave not only doesn’t overcome the gender divisions of labor, it “may possibly exacerbate them.”

More ironically yet, the high taxes necessary to maintain the family-friendly welfare state also encourage women to work fewer hours. High taxes reduce the “opportunity costs” to working 30 instead of 40 hours (or part time, a particularly common arrangement among Nordic women.) High taxes also mean that “substitutable services”—private babysitters, prepared foods, house cleaners—remain out of reach for middle-class women. (Again, Iceland is an exception when it comes to taxes; its rates are relatively low).

Now, gender equality and women in executive positions are not the only goods in life, and it could well be that children, mothers, and possibly even fathers, are better off with more family time and respite from the frenzied work-and-spend treadmill endured by many two-career families in the United States. Media reports tend to show Scandinavians to be fairly content with their lot...

Sweden, Iceland, and Norway have created hard-to-resist government incentives to get parents to share leave time equally. Fathers have between 10 and 12 weeks reserved specifically for them. (Norway’s daddy quota is only 4 weeks). Mothers have a similar number of weeks assigned to them and the rest is for couples to decide. As expected, fathers take more leave than they did before these reforms, but they still account for less than 30% of the total time available to parents. In Denmark and Finland, men take less than 9% of total leave. Recently, Denmark debated a new policy reserving more leave specifically for fathers. It was mothers who objected: they didn’t want to give up any mommy time. Swedes with children under school age have a right to shorten their work hours without risking their jobs. The result? 43% of mothers with young children work part time, compared to 10% of fathers, and gender wage gaps remain close to the OECD average, about where they were before the reforms.

As Sanandaji observes, Nordics have also turned to quotas in their quest for gender parity. In 2003, Norway passed a law requiring women to have 40% of the board seats in public companies. So far, the law has not gone as expected: there was no appreciable impact on the gender pay gap, or on women’s career plans. In fact, Norwegian companies had less experienced board members, greater company leverage, higher company acquisition rates, and declining operating performance. About 20% of the companies that would have been affected by the legislation changed their corporate ownership structure to get out of the requirement"