2023-07-21 12:22:25
In recent weeks, family policy issues such as parental allowance, spouse splitting or the survivor’s pension have been the subject of heated debate. The occasion was the negotiations on the federal budget. It is right to review existing instruments and also to identify savings potential.
In view of the shrinking working population and the often insufficient social security, especially for women, an objective assessment of the respective effects on employment incentives and equality is more urgent than ever. Both in income taxation and in social insurance, there are regulations that reduce the second earner’s contribution to household income or that make employment appear less rewarding.
Women are more likely to work part-time
In Germany, those with lower incomes who are married or in partnerships with children work less frequently and to a lesser extent than in other countries. In around three quarters of the households, these are women. The employment rate of women is now high in international comparison, but women in Germany work far more often than men part-time or are only marginally employed.
The lower employment incentives for second earners are not only problematic with regard to their own social security. In the coming years, demographic change will further intensify the existing shortage of skilled workers and workers. That is why it is also important for the economy as a whole to support incentives for taking up and extending gainful employment. The short-term savings potential must therefore always be considered in connection with the incentives to work.
Parental allowance has improved equality
According to the federal government’s proposal, parents with a total taxable income of more than 150,000 euros a year should no longer receive parental allowance in the future. So far, this limit is 300,000 euros. The proposed change affects the top four percent of the income distribution.
This is a group of people for whom no urgent financial need is typically to be expected for an income replacement during parental leave. What is neglected in the discussion, however, is that the deletion threatens to reverse an important success of parental allowance.
Parental allowance was introduced to motivate couples with higher education and higher incomes to have more children. It should also promote equality. Parental allowance has contributed to both goals: Empirical evidence shows that after the introduction of parental allowance, the birth rate rose significantly, especially among women with higher incomes and a higher level of education. In addition, fathers are more likely to be involved in childcare. The labor force participation of mothers has also increased.
The planned lowering of the income limit for parental benefits therefore primarily affects households where the intended incentives have actually worked. If the argument for sharing parental leave is taken away from them, the parent with the lower income – usually the woman – is likely to be under greater pressure again to take on parental leave alone. Lowering the income limit for parental allowance would therefore be counterproductive both for equality and for improving the demographic situation through higher birth rates.
#privileges #singleearner #marriage