One of the targets of Europe 2020 is to promote an inclusive society and to reduce the number of Europeans at risk of poverty. However a fragile start may have very negative consequences on a person’s possibility to live an independent life and on the risk of poverty during the life course, particularly for women, given gender inequalities in this respect.
Living an independent life is important for several reasons. As the European Council (2011: p. 2) stresses “young generations have an essential role in influencing the future of the European Union and its social, economic, cultural and environmental development.” In addition, “increasing the labour market participation of young women and men is crucial for achieving the headline employment target of the Europe 2020 Strategy and for supporting smart, sustainable and inclusive growth” (ibid. 3). Finally, we can argue that living an independent life is also an important goal in its own right.
Economic independence, poverty and exclusion
In almost all EU Member States more young persons (18–24; data for 18–34 not available) are at risk of poverty or social exclusion than the total population. This applies to both men and women. To give an indication of this, out of the total population 23.6% of all men and 25.4% of all women are at risk of poverty or social exclusion. In the 18–24 age group, the shares are 31% (males) and 32.6% (females). The differences between countries are large, with the highest rates found in Bulgaria, Greece and Romania. In addition, the in-work poverty among employed persons is generally higher among young people (18–24) than the working-age population (18–64) as a whole.
An important gender difference with implications for income concerns amount of working hours; women work more often part-time, and this is also the case for young women. Though terms of employment, including wages, are not necessarily worse in part-time jobs, working fewer hours implies a lower income. In addition, part-time jobs do have worse terms of employment in many EU countries (Eurofound 2011).
Access to social protection and labour market policies
Most EU countries have a system of social protections to ensure that citizens have a certain minimum income. However, most of them also have thresholds in social security that limit the young people’s access to unemployment benefits, and social assistance is rather limited. There is no direct discrimination between (young) men and women with respect to access to/coverage by social security. There is, however, an indirect impact of type of contracts. Because women more often work under temporary and part-time contracts, it is more difficult for them to become eligible and their entitlements may be lower. In the longer term, periods of unemployment generally have a negative impact on pensions. For women, this adds to the negative impact of working part-time or interrupting their career for the sake of care responsibilities.
Though many EU Member States have implemented labour market policies to tackle youth difficulties, comprehensive approaches like that in Germany, where social protection is available in combination with active labour market programmes, are not common. Moreover, very little attention is usually given to gender differences.
Starting a family
Temporary contracts and (long-term) unemployment may also have severe implications for the personal lives of young people. Between the ages of 20 and 30, many young people would like to start a family. The relationship between unemployment and family formation is rather complex. Different factors affect this relationship, and the impact of these factors differs for men and women and across countries. Raising a child is time-consuming, time that cannot be spent in the labour market (Becker 1993). For this reason, unemployment reduces the opportunity costs of parenthood and therefore may have a positive impact on fertility.
Having a child, however, is costly and unemployment generally results in lower income. This implies a negative impact of unemployment on family formation. Given the traditional gender division of labour, the specific impact is likely to differ between men and women. Unemployment may lower the female opportunity costs, perhaps making unemployed women more inclined to start a family. This is particularly the case for low-skilled women; highly skilled women will probably focus more on reintegration, as they face greater loss in terms of skill degradation and lost opportunities (Schmitt 2008).
The decision to start a family is also influenced by factors such as the housing market. In several EU Member States the share of young people living with their parents is rather high, and in all of them the share of young men living with their parents is higher than the share of young women. Cultural differences play a role, but having sufficient income is evidently also very important in this respect. In addition, in most EU countries young people face shortages of affordable housing to buy or to rent. This is reinforced by more strict criteria for receiving mortgages.
To summarise, the impact of a fragile start seems different for men and women, with women more often in precarious jobs, with lower and more insecure incomes and less social protection. Moreover, there is a group of women, particularly the low–skilled, who might opt to be full-time carers. As a result their distance from the labour market will increase, hampering their career and income prospects in the long term.
In order to realise a real inclusive economy in 2020, one where both men and women participate and are able to live independent lives, it is important that gender differences are taken into account. The next section will outline some policy options.