Does family structure matter for social inequality?

Essays | Murad Muradov | 11-03-2018, 00:55

Does family structure matter for social inequality?Family, or household, has always been one of the most important elements of a social fabric of any society- institutions, which, as Hall and Soskice claimed in their influential “Varieties of Capitalism” model, are embedded in time and tend to reproduce certain patterns of inequality and redistribution (this approach was shared by several distinguished analysts of the field, including Polanyi). Thus it is no surprise that welfare systems of the Continental European and Anglo-Saxon countries were to a great extent shaped by different patterns of family structure and behaviour. At the same time, family influenced inequality not only directly, but through its effect on income distribution as well; perceptions of proper family behaviour had considerably shaped welfare policies. As Pfau-Effinger puts it, individual and family behaviour, cultures and state policies form a “complex interrelation” whereby different elements exert mutually reinforcing influence. In the beginning, I would like to delineate one important point: stemming from the distinction made by Piketty in his “Capital in the XXI century”, I am going to analyze separately familial influence on inequalities of wealth and income. 

It is rather obvious that during the centuries of the domination of conservative social order in Europe family was a crucial institution cementing it and constantly reaffirming socioeconomic inequalities: it was assumed that only people of similar social status and thus, more or less equal financial position are to marry each other. The novels of Balzac, who provided a picture of an emerging bourgeois society in France, depicted, as mentioned by Piketty, how a marriage to a reach spouse was perceived as a means to climb up the social ladder without taking efforts and more efficiently than years of painstaking successful career would have allowed. However, as capitalist relations and democracy developed rendering social status groups more and more flexible and porous, the societal role of family in different countries has started to diverge. As Reher points out in his article, families have started to weaken in the Scandinavian countries and England (and later the USA) since long, with children leaving their parents’ houses to work independently and get married after having accumulated financial resources, while in the Mediterranean countries it was a social norm for children to leave together with their parents after marriage. Thus, different patterns of intergenerational help emerged- much more pronounced in the South and relatively bleak in the North. Germany, France and Netherlands were somewhere in between of two tendencies. 

The rise of European welfare states actualized the issue of familialism. According to Esping-Andersen’s view, all Western welfare states can be subdivided into three distinct groups- liberal, or Anglo-Saxon, conservative, or Christian democratic, and social democratic, or universal. He claims that the doctrine of conservative welfare state was strongly shaped by Social Catholic ideas, one of which is the important role of a family as an intermediary between a person and society, whereas in Scandinavian states secularization of the state was completed in the 19th century, and afterwards the church didn’t contend the role played by the state in social affairs, including education. In most of continental European countries after the World War II, however, the concept of a strong family, where husband is a breadwinner and his wife runs the house, became a cornerstone of welfare politics. High “family wages” and replacement rates for the retired pursued a purpose of forging strong adherence to a workplace necessary for quick industrial development, while emphasis on a conservative family, mothers being protected by the state, resulted in a baby boom. These factors contributed to an economic recovery of Germany, France and Italy and their catch-up with the United States by the end of the 1960s, while European countries were more egalitarian. Familial policies were very efficient due to the fact that they reflected values rooted in respective societies; as K. Morgan demonstrates in her essay, in Italy, Germany and Austria Christian democratic parties ruled the process of afterwar reconstruction, while in France, Belgium and Netherlands Christian and anticlerical forces came to a compromise which left the matters of education to voluntary organisations, mostly church-related. Hence, it was natural to assume the dependency of women and children on the incomes of a family breadwinner, and freeze the development of state-provided care programs. Progressive family taxation meant that a decision to work full-time by a housewife would not make her family better off. Welfare states tried to nurture familialism by granting pension points to women who choose to leave workforce (Esping-Andersen).Even in the 1960’s, when the need in a new input of workforce emerged, preference was given to migrant workers rather than engagement of women- much unlike Sweden (Gustavsson and Stafford). In Sweden where women got first socioeconomic rights independent of their marital status in the 19th century (Morgan), the state has been encouraging emansipation for a long time. Thus, the thesis of Pfau-Effinger about interdependence of family and welfare policies finds a clear support. The backside of familialism was the residual character the state played in providing daycare services for small children stemming from generous benefits to non-working mothers and male-breadwinner assumption (Esping-Andersen). At the same time, slowing economic growth and overall social liberalization starting in the 1970s provided more incentives for women to work. But women faced a challenge of almost inexistent state daycare, especially to the children younger than 3 years old, and sky-high prices for private services due to high wages. In some countries of this group, labour market participation of women with small children remains strikingly low-slightly higher than 30% in Austria- along with the fact that less than 10% of children under 3 years old there received state daycare services. In the Netherlands, which in the recent decades tried to reform its welfare system and push it closer to a Scandinavian model, still most of 74% women with children who work, are employed in part-time positions. It is a striking fact that although in many of these countries (probably excluding Italy and Spain), church has no longer an influential say in politics and religious cleavages have lost their salience, the institutional peculiarities stemming from them are still there. In the 1990s, the share of social services in employment was 3 times as high in Sweden as in Germany- 15.4 as opposed to 5.1% (Esping-Andersen). This testifies to the strong path dependence making societal institutions very resistant.  

The effect on inequality exerted by these family structures is not negative in general, but it has resulted in a huge poverty gap for single mothers, whose numbers have been growing. In 2000, in Germany 23.8% of single-mother households are below poverty line, contrary to only 4.5 % for full households, in Netherlands these figures constituted 6.6 vs. 22.7%, while in the countries with state-provided daycare services, the difference is much less pronounced- 4.4 vs. 13.3% in France, and 5.4 vs. 10.5% in Belgium (Misra & Miller). Conservative policies also worsen women’s economic standings as long maternity leaves result in the loss of market competitiveness, increasing the wage gap between male and female employees. Again, for full families it’s not that dramatic but it bears negative consequences for single mothers. Still, strong familial ties may help to resolve this problem to a certain extent, through daycare help provided by grandparents to their grandchildren while both parents are working and increase mothers’ chances to find full-time employment and escape poverty (Igel et al.). In Spain this is observed often enough to let researchers speak of the so-called “grandmother effect”. Thus, family may be one of the factors why conservative “social market economies” (SMEs), especially, less efficient and problem-heavy Mediterranean countries, in terms of inequality still do better than the United States. 

Moreover, persistent conservative policies have another effect which may in the long run undermine existing welfare policies, namely the dramatic fall of fertility rates which exacerbates the problem of population ageing. In Italy, Spain, and Germany, women fertility rates are the lowest in the world (1.4 in 2012). It is interesting that Japan, whose welfare system after the war has been pretty similar to that of conservative European SMEs, demonstrates similar figures. At the same time Sweden, with its traditionally weak family bonds (which is usually associated with lower fertility), enjoys highest fertility rates in the Western Europe (2.0), due to flexible state policies based on a mixed “earner-carer” model which at the same time incentivizes both parents to work and take parental leaves to look after children. 

Therefore, we can conclude that familialism-based welfare at the initial stage decreased inequality between households both directly and through contributing to economic growth which enabled more generous state benefits to families, while in the recent decades it has brought about certain problems; while inequality remains moderate in conservative SMEs, certain groups significantly worse-off on a long-term basis are formed. 

Let’s now make several points regarding the family-inequality relationship in liberal economies. Under conditions of a residual welfare state and lack of assistance to families with children, female participation in the labour market tends to be maximized. However, if upper middle-class Americans usually buy private childcare services, the majority of the population can hardly afford it and many mothers have to work fewer hours which exacerbates existing inter-household income inequalities. There is a clear trend showing that in the countries with higher income inequalities in general, intergender inequalities tend to be more pronounced, too; in the USA, the ratio of women’s to men’s average wage is 0.54, while in egalitarian Sweden it reaches 0.87 (Pontusson). Several observers, including Piketty and Pierson, emphasize that in free market economies men and women tend, while choosing spouses, to take into account his or her income, and thus high-earning persons are likely to marry each other, raising inequality between households even higher. 

Finally, I would like to briefly discuss how family behaviour and policies influence capital inequality. As I have mentioned earlier, in traditional societies family as an institution served to eternalize inequalities. However, today it might not be the same. It has been observed that in Italy, where income inequality is on the rise, wealth inequality is perhaps the lowest in Europe: in 1995, for example, while Gini for disposable income was 0.36 in Italy against 0.31 in Germany, Gini coefficients calculated for wealth were 0.59 and 0.69, respectively (Jappelli). Even in 2007, the share of wealth concentrated in the hands of the top 1 % of population was 18.8% in Sweden and only 15.3% on Italy. Whether it has something to do with family and family policies is a topic demanding a thorough analysis, but I can suppose that familialist policies providing stable high wages for middle class households, incentivize them to invest in estate or run small businesses (shops or small restaurants), where unemployed housewives can work. Indeed, a research undertaken by Larsson and Colli showed that while in Sweden family businesses mostly evolved towards large corporations, small firms leaving the market (in fact, minimum wage and some other measures swept out the firms unable to maximize productivity), in Italy family-run enterprises outside of high-tech sectors have persisted.  



The causal chains linking institutions of family with economic inequality are manifold and best understood within certain contexts. However, I tried to discern several important patterns. Firstly, strong familial ties and relations of care make the effects of income inequality milder, if not seriously improve them. Christian democratic familial policies based on traditional family roles were very successful in maintaining equalitarian growth under catch-up conditions, but they also resulted in perpetrating poverty traps for a group like single mothers. The mass entrance of women into workforce also resulted in a huge fertility drop which can have serious negative effects for the welfare state in future. In social democratic countries states were able to accommodate families to changing circumstances providing both employment and familial help, and thus these countries have better welfare perspectives as for now. In liberal states, the absence of family support policies means that families cannot reverse the trend towards further inequality. Regarding wealth, although strong families traditionally sustained economic inequality, in modern societies they rather seem to reduce it. 



Works cited:

Colli, A., Larsson, M., 2014. Family Business and Business History: an Example of Comparative Research. In Business History, 56, 1, 37-53.

Esping-Andersen, G., 1996.Welfare States in Transition. UNRISD 

Hayaishi, R., 1999. Welfare Reform and Women’s Wages. In Journal of Poverty, 3:2, 1-19

Igel, C. et al., 2009. Specialization Between Family and State: Intergenerational Time Transfers in Western Europe. In Journal of Comparative Family Studies, 40, 2, 203-226.

Jappelli, T. The Dynamics of Household Wealth Accumulation in Italy.In Fiscal Studies, 2000, Vol.2.

Misra, J., Miller, S., 2007.Work-family Policies and Poverty for Partnered and Single Women in Europe and Latin America. In Gender and Society, 21, 6, 804-827.

Morgan, K.J., 2009.The Religious Foundations of Work-Family Policies in Western Europe. In Religion, Class Coalitions and Welfare States, ed. by van Kersbergen and Manow, Cambridge University Press.

Pierson, P., 1994. Dismantling the Welfare State?, Cambridge University Press.

Piketty, T., 2013. Capital in the XXI century, Harvard University Press.

Pfau-Effinger, B., 2005. Culture and Welfare state policies: Reflections of a complex interrelationship. in Journal of Social Policy, 34, 3-20.

Pontusson, J., 2005. Inequality and Prosperity: Social Europe vs. Liberal America, Cornell University Press.

Reher, S., 1998. Family Ties in Western Europe: Persistent contrasts. In Population and Development Review, 24, 203-234.


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Murad Muradov

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