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Summary The last quarter century has produced a fundamental change in the com- position of American families and the participation of women in the work force. Women now constitute 45 percent of the labor force, and the domi- nant pattern is for both parents to be employed, even when children are very young. The proportion of households headed by a single adult, usually the mother, has also increased sharply almost a quarter of all workers who maintain families. Although social institutions are gradually adapting to the new work force configuration, the process is slow and there is little consen- sus about how the burden of adaptation should be shared. The Panel on Employer Policies and Working Families was asked to synthesize and as- sess what we know about these changes, to evaluate policy alternatives, and to assess the need for further research. Although the research on many of the relevant topics is limited, analysis of the available data and discussions with experts in the field enabled the panel to assess the major areas of conflict between work and family responsibilities and possible ways of eas- ing them. Our examination focuses on existing policies and programs, recognizing both the possibilities and the limitations of employer actions within the broader context of current economic conditions and public policies. Thus our findings and conclusions are embedded in a perspective that recognizes not only the needs of workers, but also the constraints faced by employers in attempting to improve their operations and maintain the financial health of their organizations. Some consideration is thus given to a range of related government policies addressing issues of economic security, equal opportunity, dependent care, and health care.

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2 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE CONSEQUENCES FOR FAMILIES AND FOR WORKPLACES An estimated one-half of U.S. employees have responsibility for at least one dependent, 37 percent have children under the age of 18, and fewer than one-third have a spouse at home full time. In 1988, 57 percent of married women with children under the age of 6 were in the labor force compared with 19 percent in 1960. Approximately 10 percent of full-time employees are actual or potential caregivers for elderly relatives. This group is expected to increase substantially over the next several years, as both the number of elderly people requiring care and the number of em- ployed women continue to grow. An estimated 2 to 3 percent of employed people are caring for working-age adults. Employers now provide an extensive base of benefits, accounting on av- erage for about 28 percent of total compensation. Benefits arrived at volun- tarily or as the result of collective bargaining account for about 19 percent of compensation. Commonly provided benefits include vacations, health insurance, sick leave, and pensions. Recently, some employers have added new types of benefits, such as child and other forms of dependent care. The availability of these types of benefits, however, is very uneven across organizations, industries, and occupations. Paralleling the emergence of new family-oriented benefits, many employers have begun to reduce health insurance coverage particularly dependent care. The loss of health insur- ance protection increases the likelihood that family members will not re- ceive necessary health services and exposes families to the threat of finan- cial ruin. Over 30 million people in this country have no health insurance, including 12 million children, most of whom live in families with an employed adult. While the number of firms offering family-related benefits has been growing, many employers have not yet adapted to the legitimate needs of workers with family care responsibilities. In some firms, workers lack benefits that are now considered essential in mainstream employment. It appears that the majority of employed women have no paid leave for pregnancy and child- birth, and a small number of employees have no leave for their own illness. Small, less profitable, and more labor-intensive firms, often in the retail trade and service sectors, tend to provide few benefits. Only 46 percent of employees in small firms have paid sick leave, compared with 67 percent in large firms. While small firms are somewhat more likely to offer part-time work and flexible schedules, part-time jobs usually pay less and have fewer benefits than comparable full-time jobs. Small firms employ 38 percent of all workers and a large proportion of women and minorities, so the absence of benefits places already vulnerable groups at increased risk. While research shows that many results of combining work and family are positive, there are negative results as well, particularly for women, who

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SUMMARY continue to be the primary caretakers. Especially for families with single parents, there is evidence that economic and psychological stress has nega- tive developmental effects, particularly on children from low-income fami- lies, which includes many minority children. For employers, there is tenta- tive evidence that family responsibilities exacerbate such workplace problems as retention, absenteeism, tardiness, and work interruptions. Factors found to be associated with these concerns include: terms of employment, such as the number of hours and weeks worked and the degree of flexibility in work schedules and locations; the availability of services for family members, such as child care; and the extent to which family concerns are recognized as legitimate in the workplace. The scarcity of affordable, good-quality dependent care for children and elderly people, as well as parents' lack of time to handle family matters, underlie most factors noted. We believe that families need additional supports. To be successful, these must involve men as well as women and take into account variations in family preferences, income and occupation, and different points in the life cycle. Our reading is that the current system of employee benefits, although substantial, is inadequate for the new, diverse labor force. Employers facing tight labor markets, particularly for skilled workers, will continue to innovate in providing benefits as an aid to recruitment and retention. These innovations are important for testing new concepts and establishing their costs and benefits. However, the constellation of tax policies and rising real incomes that sustained the growth of benefits from the 1950s through the 1970s has altered. Stagnant real incomes, low in- come tax rates, and increased domestic and international competition no longer support widespread growth in benefits. The panel sees little prospect that benefits will improve for the majority of workers absent government action. The panel assessed a range of public policies for family-related benefits, including tax incentives, regulations, and other legal requirements. Our conclusions suggest general directions and broad outlines for policies and programs, but, in the absence of clear evidence pointing toward preferred options, the panel does not make recommendations on specific public poli- cies or implementation mechanisms. CONCLUSIONS The panel's conclusions are based on the assumptions that family issues are a legitimate employer responsibility, but that the burden of adapta- tion should not rest exclusively with employers. A substantial base of family-related employee benefits and government supports already exists. We believe improvements will bring about a better match between insti- tutional practices and social and economic conditions.

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4 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE Terms of Employment Because flexible policies and choices among a variety of programs are likely to reduce work and family tensions, the panel concludes that open- ness to experimentation on the part of both managers and workers is impor- tant in solving existing problems and meeting constantly changing cor~di- tions. The panel concludes that: For the economic, physical, and psychological well-being of employees and their dependents, some form of paid sick leave, including paid leave for medical-related disabilities for pregnancy and childbirth, and some form of family leave, to care for infants and ill family members, are essential. The panel urges policy makers to explore various approaches to financing and phasing in such benefits so as to minimize economic disruption, spread costs equitably among the community at large, and prevent discrimination against those who use leave. On the basis of experiences in this country and Western Europe, em- ployers and unions should consider increasing a variety of options, in- cluding part-time work, flexible schedules, and alternative work loca- tions. Ensuring that unintended negative effects, such as the loss of benefits, do not occur is also essential. Direct Provision of Services The panel found that employers can in some circumstances efficient! gather and disseminate information about the availability and quality of family services, provide services or supports when they are not available elsewhere, and offer indirect support for services through flexible benefit systems, thus increasing employee choices The panel draws the following 1 . conclusions: As far as economic conditions permit, employers and unions are en- couraged to support the development and expansion of resource and referral programs, employee assistance programs, and various types of direct and indirect assistance for the care of children and elderly and disabled family members. Employers should review the structure of their current benefit systems, on the basis of needs assessments of current employees and an examina- tion of utilization data on existing benefits. Employers are encouraged to consider adopting flexible benefit packages, balancing the need for core benefits against the advantages of more choice.

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SUMMARY s While recognizing the need for health care cost containment, we strongly encourage employers who provide health insurance to maintain cover- age for workers and their dependents. Employers offering very minimal health coverage are encouraged to improve it when possible. Access to health insurance and health care services is an urgent national problem that deserves a place high on the national agenda. Program Implementation and Dissemination Because changes in organizations are likely to meet with resistance, spe- cial efforts must be made to encourage the adoption of programs and to facilitate their implementation. The panel encourages: Managers and union representatives to reassess the needs and prefer- ences of employees, taking into account occupational, income, and cul- tural differences and to give high priority to identified programs and needs. The development of training programs for manager, workers, and union representatives to help them recognize the importance of family issues and to encourage the participation of both men and women in family- oriented programs. Governments (federal, state, and local) to support employers in the development and implementation of useful programs and demonstra- tion projects, including education and dissemination. Data Collection and Research We have noted throughout the report where the research evidence is weak or contradictory and where there is simply a need for more data. Collecting and analyzing information is costly, however, and a good many decisions can be made without waiting for further research. We therefore urge collection and analysis of additional data only when they are necessary for formulating policies and when they are most likely to be cost-effective. The panel concludes that priority should be given to two areas: Augment data collection efforts at both the individual and the firm level, including institutionalizing the national longitudinal data collec- tion efforts that have made possible a great deal of useful research on important issues, as well as developing better measures of time use, benefits, and working conditions and expanding the collection of establishment-level data.

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6 WORK AND FAMILY: POLICIES FOR A CHANGING WORK FORCE Expand the research agenda to include more research on the long-term effects of various ways of caring for children on their development, on the work performance of caregivers in general, and on the changing roles of men and women at home and at work. Additional research is also needed on program evaluation and on differences in work and family issues by occupation, income, and race and ethnicity. In summary, this study offers an ambitious agenda for employers and suggests the need for additional public policies. We note, however, that some employers, particularly large firms, are already doing more than what is suggested in this report. New programs would nonetheless increase the costs for others, especially small and labor-intensive firms, as well as for taxpayers and consumers. In return, however, the large and growing pro- portion of working people with responsibilities to job and family would be helped to do justice to both. In terms of national interest, it is difficult to overstate the importance of finding a new equilibrium for work and family. Greater awareness on the part of all interested parties of the extent to which their interests coincide is crucial in meeting workplace challenges. Conflicts are inevitable, but much can be achieved by relying not only on altruism, but also on the far-sighted self-interest of all the parties involved.