Reframing Family Policy

Ivana Greco

Current Issue

At a time of deep division, the notion that parents should work outside the home and leave the care of their children to others appears to be one thing on which Democrats and Republicans can enthusiastically agree. During the 2019 State of the Union Address, when President Donald Trump declared that "[a]ll Americans can be proud that we have more women in the workforce than ever before," Democratic congresswomen wearing all white to symbolize the fight for women's equality joined their Republican colleagues for a bipartisan standing ovation.

That consensus has spilled over into President Joe Biden's administration, which is pushing for policies like universal preschool to enable more mothers to remain engaged in a career. Not to be outdone, the Republican National Committee (RNC) responded by criticizing Biden for pandemic policies that inhibited women's reentry into the workforce. "1.5 million U.S. mothers have fallen out of the workforce, and many are staying home to take care of their children because schools have not re-opened," the RNC tweeted in May 2021. "Biden is proving to be a detriment to getting mothers back to work."

The private sector is also on board. Throughout the 21st century, businesses have made significant efforts to redesign their employee benefits programs to keep young parents — and especially new mothers — in the workforce. Businesses routinely tout their flexible schedules, maternity- and paternity-leave policies, and access to back-up child-care arrangements. Many now offer lactation rooms for working mothers with nursing infants, while others reimburse women for shipping breast milk back home during work trips. Some have gone so far as to pay for female employees to freeze their eggs. In the wake of the Supreme Court's ruling in Dobbs v. Jackson Women's Health Organization, a handful of high-profile firms announced the addition of abortion-related travel expenses to their benefits packages.

Far less attention has been paid to supporting families who prefer to have one parent care for children at home. Employers don't routinely hire specialized consultants to design benefits programs to better support families with homemaker spouses. There is no prominent list of "Best Workplaces for Families with a Stay-at-Home Parent."

But the push for all families to have two full-time working parents ignores the priorities of many. Survey after survey shows that most ordinary American families would prefer for one parent to work and the other to care for the children at home. And while not all out-of-home childcare arrangements are deficient, studies indicate that low-quality institutional childcare can harm children in the long run — and a significant percentage of the institutional childcare offered to families in the United States is of low quality.

More fundamentally, the desire to put all parents to work overlooks the importance of stay-at-home parents to the overall well-being of the family and the community. When both parents are juggling full-time jobs, activities like enjoying home-cooked meals as a family, creating connections with neighbors, caring for elderly relatives, and volunteering within the community tend to fall by the wayside. When one parent is able to remain home, these activities become more doable.

American family policy has been ignoring the homemaker for far too long. To address this shortcoming, policymakers should rethink existing policies with the mothers and fathers who take time out of the workforce to raise children in mind. For their part, private businesses should prioritize providing excellent health care and disability coverage to the whole family.

These changes would allow more families to bring mom or dad home, improve the lives of children who are currently suffering in low-quality institutional care, and help revitalize local communities across the country. For any such course correction to occur, however, government and business leaders must first recognize the value that homemakers bring to their children, their spouses, and their communities at large.

WHAT FAMILIES WANT AND WHY

The data we have are clear: Most two-parent families with young children would like to have those children cared for at home. In 2019, a Gallup poll found that 50% of women with children under age 18 would rather be a homemaker than work outside the home (compared to 45% who would prefer to work outside the home). Likewise, a 2021 American Compass survey found that 53% of married mothers believed having one full-time homemaker parent and one full-time breadwinner parent was the ideal arrangement for their family while raising children under age five. This arrangement was also the most popular choice among married fathers.

What is less clear is why some families prefer having both parents work while others favor keeping one parent at home. The data we have offer some clues. A survey reported by the Institute for Family Studies, for instance, shows that only 14% of Hispanic families think full-time paid childcare for children under four is the best arrangement for their families, making these families more likely than those of other ethnic groups to prefer that a parent take care of young children. This difference suggests that childcare preferences are influenced by cultural and familial values.

Other surveys have demonstrated that family preference for having a homemaker parent also varies considerably with parents' education and wealth. The Gallup poll cited above indicated that mothers with more formal education were more likely to prefer working outside the home than mothers without a college degree. Similarly, the American Compass survey showed that only highly educated, high-income-earning parents preferred placing their children in institutional childcare; lower-, working-, and middle-class parents favored childcare arrangements involving a parent or other relative.

Together, these findings present a counterintuitive narrative about stay-at-home parents. Wealthy parents with advanced degrees want both mom and dad to work and to pay for childcare outside the home, and they have successfully shaped government and employer policies to suit those preferences. Everyone else, however, would prefer to have their children cared for at home. Both legislators and employers have left these families out in the cold.

Rather than supporting the single-income family arrangement that most middle- and working-class Americans want, the Biden administration has elected to pursue policies that assume they would prefer to send their children to daycare. Worse still, history indicates that Biden's attempts to decrease daycare costs and increase enrollment through regulation and subsidies are likely to aggravate some existing inequalities and challenges for those families.

A landmark study from Quebec is instructive on both counts. In the late 1990s, Quebec rolled out a "$5/day" program for childcare, hoping to increase women's workforce participation. This program did dramatically increase the number of women in the paid workforce, but it came at a steep cost to the children involved.

Despite attempts to comprehensively regulate the daycare sector, Quebec found it difficult to ensure high-quality care, struggling (among other things) to find enough qualified early childhood educators and enforce universal standards among centers. In 2005, researchers released a working paper with the following summary of the program's impact:

[W]e uncover striking evidence that children are worse off in a variety of behavioral and health dimensions, ranging from aggression to motor-social skills to illness. Our analysis also suggests that the new childcare program led to more hostile, less consistent parenting, worse parental health, and lower-quality parental relationships.

A follow-up study published in 2019 revealed that these harmful effects on children extended into the long term. Children enrolled in the program reported significantly worse health and life-satisfaction scores, with boys tending to fare worse than girls. The publicly funded childcare program was also linked to a significant increase in crime.

In fairness, other studies have found that in some situations — such as when government-funded childcare is provided specifically to families struggling economically or when the programs are very small — policy interventions can yield positive long-term results. But a 2022 study by Vanderbilt University researchers on children who participated in Tennessee's publicly funded preschool program found results that were distressingly similar to Quebec's. According to the report, children who participated in the program earned lower test scores in elementary school, experienced more disciplinary problems, struggled more with school attendance over the long run, and were more likely to require special education services than their peers. Like Quebec, Tennessee had set standards for preschools, but researchers nevertheless found wide variations in quality among the various centers.

The truth is that many American families do not have access to high-quality and affordable institutional childcare. Plenty of ink has been spilled over policies designed to increase the quality and decrease the price of daycare, but none of these proposed policies have proven more successful than the simple solution that most ordinary families prefer: making it possible for mom or dad to stay home and take care of the children.

This family preference should be treated as a policy priority. Not only would it be popular, it would also be socially beneficial.

The myopic focus on enabling both parents to participate in the paid workforce loses sight of the fact that most of the work performed by homemakers benefits not only families, but their communities as well. In a direct sense, providing a young child with a supportive home environment shapes the kind of adult he will become. Replacing poor-quality daycare with the loving, hands-on care of mom or dad, therefore, can have a positive influence on the next generation.

More broadly, homemakers are instrumental in building the institutions that have formed the basis of American civil society since the founding. Associations of homemakers were critical during the Revolutionary War — the Ladies Association of Philadelphia, for example, raised funds for the Continental Army. Similarly, the 18th-century Homespun Movement began with American women producing clothing at home to disrupt the British textile industry and ultimately led to community "spinning bees" to create military uniforms. Throughout the 19th century, America's mothers formed civic associations that shaped all of society, including education policy and assistance for the poor. They were also a major driving force behind the anti-slavery and voting-rights movements.

Yet as mothers increasingly entered the paid workforce outside the home throughout the 20th century, these sorts of activities fell by the wayside. In The Atlantic, Emma Green points out the trade-offs this trend has entailed:

In the years since women's liberation...civic engagement has dropped precipitously. The kind of community involvement that has replaced it, where it has been replaced at all, is a weak substitute: When women advocate, it's often on behalf of their own kids or families. And when they get involved in causes, they tend to cut checks....The most vulnerable members of society have lost their best allies — women — partly because those women are too busy working.

That's not to say that all women should relinquish their hard-earned rights and return to their homes; plenty of mothers have career-oriented aspirations that they should be free to pursue. But many other mothers (and fathers) prefer to stay home, raise their children, and engage in the sorts of community-building activities that propelled our nation through economic upheavals, environmental catastrophes, social and industrial revolutions, and war. We would do well to consider how our public policy might accommodate them.

RETIRING OLD POLICIES

Despite their shrinking numbers, homemakers continue to play a central role in American civic life. Their valuable, albeit underappreciated work should be recognized and supported by policymakers and business leaders alike.

Prioritizing homemakers is easier said than done, however, and any call for new interventions into family life should be considered with caution. That said, some of the changes that could offer the most help involve modifying existing policies. In particular, the ways we approach retirement, disability insurance, and health-care policy are ripe for reform.

When it comes to retirement, government benefits for married female homemakers have changed little since Social Security was created in the 1930s. At the time, it was typical for a husband to work throughout his life and for a wife to either never enter the workforce or to drop out for good after becoming pregnant with her first child. Yet over the years, work patterns have changed. Today's homemaker is more likely than a homemaker of the early 20th century to move in and out of the workforce based on family needs. Our existing benefit structure, however, tends to assume either that one parent will remain a full-time homemaker or that both parents will work full time for their entire adult lives. The task before legislators today is to update retirement policy to accommodate the needs of contemporary families.

One place to start would be to focus on Social Security's model for earning credits. To gain a better understanding of the current credit system's design and its flaws, we can look at two hypothetical married couples: Alice and Bert, both born in the 1940s; and Isabela and Carlos, both born in the 1980s.

After working in the same factory for his whole career, Bert's total retirement benefit is calculated based on his average monthly earnings during the 35 years in which his income was highest. Alice, his spouse, spent most of her adult life as a homemaker and did not earn the 40 work credits necessary — about 10 years of work — to receive a Social Security retirement benefit. At Bert's retirement, Alice will receive half of his benefit as her spousal benefit. Upon his death, Alice will receive the full amount of Bert's benefit as her widow's benefit.

Like Bert, Carlos also held down a job for most of his adult life, and he is rewarded with a generous retirement benefit. Unlike Alice, however, Isabela moved in and out of the workforce throughout her adult life: She initially took a job as an administrative assistant in her early 20s, left that position when her first child was born, returned to work when her youngest entered kindergarten, dropped out again to care for her aging mother, and finally went back to work as a paid caregiver for the elderly. Over the years, she racked up enough credits to earn her own retirement benefit. But because she didn't work for the full 35 years on which those benefits are calculated and didn't receive the pay raises she might have earned throughout a more linear career, she is better off taking her spousal benefit — half of Carlos's sum — than accepting her own. In other words, Isabela will receive no credit for her time in the labor market simply because she elected to split her time between work and the home.

To address this problem, legislators should update the Social Security credit system to recognize that, rather than staying at home their entire adult lives, homemakers today often move in and out of the workforce. One option for doing so would be to implement a system of childcare credits for homemakers that would allow parents to continue to accrue Social Security credits during the time they are at home with their young children. This sort of credit would reduce the disadvantages of stepping outside the workforce to care for children and could be distributed in a number of ways. A means-tested system of childcare credits designed primarily to benefit low-income homemakers, for instance, could offer a credit at minimum wage for the years a mother stays home to care for young children while her spouse remained in the workforce.

Alternatively, a simple system of childcare credits could allow parents who temporarily drop out of the workforce to care for children under three to reduce the number of credits needed to receive a benefit so long as their spouse remains employed. A young mother who leaves her job for three years to care for children while her husband continues earning income to support the family, for example, would only have to work an additional seven years to qualify for a benefit, and the value of that benefit (her average indexed monthly earnings) would not be reduced based on the time she spent caring for her children. The benefit would be calculated based on 32 — rather than the full 35 — years of work. Such a change might also incentivize homemakers to return to the workforce once their children are grown.

Creating a system of childcare credits could also help homemaker parents who become disabled while outside the workforce. Today, the Social Security Disability Insurance (SSDI) program requires an applicant to have worked a sufficient number of years in order to qualify. It also includes a recent work requirement. A 30-year-old who becomes disabled will usually need to have worked at least half the years between ages 21 to 30 to qualify for SSDI. If a homemaker worked for two years from ages 19 to 21, left the workforce at 22 to care for her children, and became disabled at 30, she would not be eligible for SSDI. And unless her family was very poor, she would also likely be ineligible for Supplemental Security Income (SSI) — an alternative program for very low-income disabled individuals. By ensuring she meets the work requirements to qualify for SSDI, a well-designed system of childcare credits would help protect homemakers if they were to become disabled.

SAVING FAMILY SAVINGS

In addition to Social Security, legislators should consider reforming the tools that families with a breadwinner and a homemaker have at their disposal when saving for retirement. Today, the primary retirement-savings program available to these families is the workplace 401(k) plan. Despite their benefits, such plans present a unique problem to families with a sole breadwinner: Since a 401(k) is held in the employee's name only, the homemaker spouse does not have title to it. This arrangement has serious implications for homemakers and their families.

To start, it puts breadwinner-homemaker families at a financial disadvantage compared to families with two working parents. In 2022, for example, an employee could elect to contribute up to $20,500 to a 401(k) (or $27,000 for people age 50 or older). Meanwhile, the maximum contribution to a spousal IRA — the best alternative to a 401(k) available to homemaker parents looking to save for retirement — was $6,000 (or $7,000 for those age 50 or older). In practice, this often means that a family with two working parents under 50 can put away $41,000 per year, whereas families with a homemaker can only shelter $26,500.

Our current retirement-savings system can also hurt single-income-earner families on a deeply personal level, often causing them great distress in cases of divorce and death. If a breadwinner husband divorces his homemaker wife, the latter is frequently forced to resort to litigation in order to access any retirement funds (despite the fact that the Employee Retirement Income Security Act of 1974 provides a mechanism for the couple to apply for a qualified domestic relations order and divide qualified plan assets). Worse still, widows are sometimes unaware of their spouse's 401(k) and may be unprepared to deal with retirement funds in the event of their spouse's death.

To address these problems and level the playing field, Congress should consider creating a Family Retirement Account (FRA) that gives households with a homemaker access to the same tax-sheltered space that two-income households can use. Couples should be allowed to hold joint title to an FRA in the same way they can hold joint title to a bank account or a house. Financially speaking, this arrangement would make it easier to consolidate multiple retirement-savings accounts at a single institution, help people avoid costly administrative fees, and give more families the possibility of accessing the preferred shares available to retirement savings accounts with larger balances. On a more personal level, it would dignify homemakers by giving them direct ownership of the family nest egg and its management, make it easier for couples to plan and coordinate for the future, and — in the event of death or divorce — make the redistribution of retirement funds much less painful.

INSURANCE FOR THE FAMILY

Although the ability to save for the future is important, in the here and now, no issue is more essential to America's young families than access to affordable, high-quality disability and health insurance. With that in mind, working with employers to improve insurance options available to homemaker spouses and minor children should be a central priority of any family policy agenda.

Disability insurance offers a promising place to start. Designed to replace a portion of the employee's wages in the event of an injury or illness, disability-insurance policies are typically categorized as either short- or long-term. A short-term disability policy might cover 100% of an employee's wages for six months, while a long-term policy might cover 60% of wages until retirement age after the initial six-month period ends. Most people in the workforce receive disability insurance through their employee benefits package, but this coverage does not extend to their homemaker spouses. The government disability programs discussed above (SSI and SSDI) don't usually cover homemaker spouses, either.

When a breadwinner becomes disabled, the family suffers an obvious financial hardship. Less obvious — though no less substantial — are the expenses a family will incur if a homemaker becomes disabled. Everything from childcare and transportation to cooking, housecleaning, caring for elderly relatives, and more will need to be accounted for. Moving forward, private firms should be encouraged to work with insurers to develop a product for insuring homemakers against disability.

Policymakers also need to tackle several challenges that make it more difficult for American families to afford health insurance. Under the Affordable Care Act (ACA), an employee whose health-insurance premiums are unaffordable is eligible to use government subsidies to purchase health insurance through the ACA marketplace. However, these subsidies are only available if the cost of premiums for individual health insurance is unaffordable — if the cost of family health insurance is out of reach, no such subsidies are available.

This oversight, known colloquially as the "family glitch," can put families that include a full-time homemaker in a bind. Take Carlos and Isabela — the hypothetical couple from our discussion of Social Security benefits. If Carlos has to spend more than 10% of his salary on his individual health-care premiums, he is eligible for an ACA subsidy to help cover his expenses. But if a policy for him alone would cost 8% of his salary while a family policy would cost 20%, he and his family would be ineligible for subsidized coverage.

As a result, families with a breadwinner and a homemaker can be stuck with the unpleasant choice of trying to afford expensive group health coverage through an employer or paying for two sets of premiums. Oddly enough, low- and moderate-income couples would sometimes be better off if they were not married for health-insurance purposes, since the homemaker and children would then be eligible for Medicaid while the breadwinner could receive government subsidies for health insurance as an individual.

The Biden administration has proposed modest regulatory changes to address the family glitch. Though such measures would represent an improvement on the status quo, they would remain subject to judicial challenges as well as reversal by a future administration. Bipartisan congressional action would be harder to come by, of course, but its effect would be more permanent and far better for families in the long run.

Congress could also do more to encourage employers to provide affordable health-care plans for the whole family. The ACA already requires companies to offer health benefits to an employee's dependents, but it has no similar requirement for spousal health coverage. To be sure, the vast majority of employers do offer health care for spouses, but family health coverage through an employer is often prohibitively expensive. In 2011, the average employee paid $4,129 in annual health-care premiums for family coverage; by 2021, the cost had risen to $5,969. (For comparison purposes, an individual worker paid, on average, just $1,299 in 2021.)

Figures like this can cripple the finances of low-income families. One survey found that full-time workers earning under 200% of the federal poverty level pay an average of 10% of their household income toward health-care premiums and out-of-pocket costs. Families making between 200% and 399% of that level paid 7% of their annual income on similar expenses.

Compounding these costs is the fact that private firms contribute much less in subsidies for family coverage than they do for individual coverage. On average, employees pay only 17% of the premium cost for individual coverage but 28% of the premium for family coverage. At small firms, employees pay on average a whopping 37% of the family premium cost.

Private businesses should prioritize providing affordable family health-care coverage. In recent years, employers have expanded benefit packages to demonstrate concern for the popular concept of corporate social responsibility, including modifying health-care benefits to cover services from egg freezing for corporate executives to travel reimbursement for employee abortions. True corporate responsibility would give far greater attention to enabling a business's ordinary employees to support their dependent spouses and children.

If private corporations are unwilling or unable to do so, federal policy should change to ensure corporations are not prioritizing the health-care benefits of single employees over those for families. This could be done by reforming the rules for non-discrimination testing, which help ensure employers do not give preferential benefits to some classes of employees over others.

BACK TO BASICS

In recent decades, the belief that both parents should work full time while children are placed in institutional childcare arrangements has informed policies ranging from the ways Americans save for retirement to how they purchase health care. Even sincere attempts to improve life for American families today come with the assumption of a dual-income household baked in.

This assumption makes little sense. Most married parents prefer that one parent remain at home to care for young children. The people who prefer this arrangement are typically from lower- or middle-class families with limited access to the high-quality childcare that many elites take for granted.

Rather than spending more taxpayer dollars to pursue policies like universal preschool — as the Biden administration is currently attempting — policymakers should make it easier for families to thrive on a single income. To provide the most assistance, policymakers should concentrate their efforts on areas where programs already exist but are not serving the needs of the modern American family — namely Social Security's retirement and disability programs, 401(k)s and other financial tools, and the health-insurance marketplace.

Pressuring families to keep both parents in the workforce while their children are young may be beneficial for GDP, but it has come at a significant cost to the American people. Moving forward, policymakers and employers interested in improving life for American families should privilege the vision of the family that most Americans naturally prefer: one in which mom or dad can stay home with the children.

IVANA GRECO practiced as an attorney specializing in qualified retirement-plan advising and health-care litigation until 2021. During the Covid-19 pandemic, she became a stay-at-home mother.


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