Financing Parenting

A chapter from her forthcoming book, Taking Parenting Public: The Case
for a New Social Movement
(Rowman & Littlefield, Lanham, MD). Reproduced
with permission from the National Parenting Association.

Ask parents and many of them will tell you they would like to be able to take some time out from their jobs so they can devote more attention and energy to their kids. A recent study by Public Agenda, a nonpartisan public policy research organization, reports that most parents (68 percent) “would prefer to stay home with their children when they are young.” Among parents with children under five, 80 percent of mothers say this and 52 percent of fathers.1 Public Agenda's report set off a predictable outcry – especially among child-care advocates and some feminists. But before rushing to refute it, maybe it's time we listened carefully to what parents are actually saying.

Parents are not arguing that mothers shouldn't work – of course, they should be able to – or that we don't need higher quality, more affordable child care. Of course, we do. But more and better child care is just part of the solution. We also need to re-engineer our work lives to create more time for parenting. Public Agenda's report confirms what the National Parenting Association has found in our own polls.2 Parents don't define their biggest struggle as finding child care, they see it as balancing work and family. Even more striking is the finding that both mothers and fathers say that balancing job and family responsibilities is their toughest daily challenge. And almost half of full-time working mothers surveyed said they don't have enough time for their kids. Research by both Public Agenda and the National Parenting Association shows that given a choice of public policies, parents would much prefer to see tax breaks that make it easier for parents to cut back on job hours and incentives for businesses to adopt flexible work policies, than massive new subsidies for a national child-care system.3

We are fed up with either-or choices of uninterrupted work from graduation to grave versus jettisoning hard-earned degrees and years of job experience if we choose to spend more time at home for a few years raising our kids. For lower-income and single parents the choice is even starker: the income to support your children versus the time to care for them in the way you deem best. It's time for a new paradigm that allows us to take a chunk of time out from our lives of paid work to give the unpaid, but no less important, work of parenting the attention it deserves.

If so many parents are yearning to stay home with their children during their earliest years, what stops them? One factor is certainly well-founded anxieties about returning to the labor market and visions of lifetime career setbacks. Some want the continued rewards of work, but with scaled-down hours. For many parents, though, the biggest barrier is practical: they can't afford to.

Here's a proposal to help them. Why not allow working parents to draw social security benefits for up to three years during their prime child-rearing years? This would give moms and dads a real choice about how much time to spend working and how much time to spend with their kids. Some parents would decide to stay at home or cut back to part-time work so they do not become entirely disconnected from the labor market. To help cover the costs, those who elected to “borrow on their social security” could repay the system, at least in part. For example, benefit-takers could increase the employee's share of the payroll taxes they pay in when they return to work, they could defer their age of retirement with full social security benefits on a year-for-year basis, or they could accept a reduced monthly benefit, as those who opt for early retirement do now.

Any of these options would still involve some subsidy; otherwise the required payback would take too steep a cut out of future paychecks or retirement benefits to make it an affordable choice. Given our “pay-as-you-go” system of financing senior benefits out of tax contributions from current workers, you can argue this is fair. Without parents devoting time and resources to raising children, there will not be productive employees in the future whose earnings will be taxed to pay the bill for the older generation. And that is, in fact, exactly the argument made in a recent decision by Germany's Constitutional Court. It ruled that workers with children should pay a lower premium for the country's compulsory long-term nursing care insurance plan than childless ones on the grounds that future beneficiaries will depend on the premiums paid by coming generations of workers. “Those people who have not helped to maintain the number of future contributors – i.e., the childless – are getting an unfair financial advantage, says the court. So they should pay more.”4

How much of a difference would the ability to draw social security make for parents trying to make ends meet? Plenty, it turns out. Taxes and child-care costs take such a big bite out of parents' incomes that even modest benefits could largely replace the net income from an average job.5 For example, a parent earning a second salary of $30,000 (assuming the spouse also makes $30,000) would net only about $10,065 after taxes, child care, and work expenses (see box). That works out to about the same as the average annual social security income for retirees of $10,140 in 2001. It's enough to make a real difference for American families.

Net Income After Taxes, Child Care and Work Expenses

Example: A two-earner couple where each parent makes $30,000

The second salary:
Social security and Medicare taxes
Additional state/local taxes (@ estimated rate of 5%)
Estimated additional federal income tax
Additional child care (estimated at $120/week)*
Commuting costs ($25/week times 50)
Cost of work clothing and dry cleaning
Cost of restaurant meals on work days ($25/week times 50)
Other (non-reimbursed expenses, paid help, meals out, etc.)
Net income
*Based on US Census figures for weekly total child care costs per family (for families including a preschooler) adjusted for inflation. Source: What Does It Cost to Mind Our Preschoolers, US Census, 1995. Calculations used in this example are adapted from a model appearing online in on April 13, 2000. Estimates are based on federal tax rates at that time.

Among mothers or fathers taking advantage of this option, most would probably stay at home during their children's earliest years. But we know that kids' needs don't magically disappear at age three. A struggling third-grader or a troubled teen can be just as demanding of parental attention. This proposal would let parents decide what makes sense for them and their families.

One issue that would need to be addressed is overcoming barriers to workforce reentry. It is unrealistic to expect that employers be asked to guarantee someone's job after a leave of a year or more. Fears of getting back on track are justified. The career highway is easy to exit, but difficult to get back on. We need to create more “on-ramps” – opportunities and recruitment strategies that give workers a path to accelerate back up to speed and full productivity. For example, employees on an extended parenting time-out could maintain an alumni-like status with their former employer, kept in the loop with regular contacts and invitations to participate in training and staff development. They would become a prime candidate pool for rehires. Incentives could be created to encourage professional associations, unions and local colleges to offer transition training to update skills and place returnees.6 More fundamentally, we need messages to change the national mindset, so that nurturing children is seen as a respectable addition to lifetime accomplishments, not discounted as a brain cell diminishing résumé gap.

Continuation of health insurance would also need to be addressed, although for married workers with a covered spouse this would not be a problem. Others could buy into their former employees' group plan or perhaps into Medicare.

Thinking of social security as a kind of savings' account that parents could tap into is a natural offshoot of the current policy debate. Some companies offer employees 401(k) thrift plans that they can borrow against to make major purchases. But many working families don't have this benefit. It's hard for young parents to save early on during the stage of life when they are having children and also trying to buy their first home, pay back education loans or start businesses. Indeed, economists have long recognized that young families are vulnerable to a type of “market failure.” Banks are not likely to lend them money based on a hypothetical future earnings stream – but the social security trust fund could. It makes sense to think of our retirement system as a means to promote social investment – truly our national social security. Looking at it this way, we could also consider allowing Americans to draw social security benefits for limited periods for other valued social investments in addition to parenting, such as caring for an aging relative or midcareer retooling to obtain new job skills.

Even as medical science is creating time in our later years, we are increasingly starved for time during mid-life. True, the growing availability of work-life practices, like flextime and telecommuting, helps some workers balance job and family. But lower-income and younger workers, who need these policies the most, are the least likely to work for firms that offer such benefits. The National Parenting Association survey found that only 6 percent of parents in families earning under $20,000 a year worked for family-friendly firms, compared to 30 percent of parents with annual incomes over $60,000.7 Employer flexibility is enormously important, but it is unlikely to sufficiently ease the time famine facing working parents and others trying to meet pressing personal responsibilities. If the problem is the need to “borrow time,” one solution is to use our social security system as a “time bank.” It is an idea worth serious consideration.

Adjusting the social security system we designed in 1935 to fit present-day needs of working people is not as radical as it first sounds. In fact, during the 2000 presidential campaign Al Gore proposed changing the way social security benefits are calculated to help offset what he called the current “motherhood penalty.” When a parent, most often mom, takes time out of the paid labor force to stay home raising the children, she not only loses the income she would have earned then, but will have lower social security benefits in the future. Gore proposed crediting stay-at-home parents with $16,500 in income for up to five years. By his calculations that would give an average of $600 a year more in benefits to as many as eight million retirees.8

Gore's idea recognized the importance of parenting by acknowledging the contribution parents make to society through the unpaid work of nurturing children. And it offered modest financial benefits, primarily to older women. But the bolder proposal offered here – allowing parents to actually draw social security at two points in their lives – would offer real relief from the time crunch to the millions of Americans struggling to meet the dual demands of job and family every day. As Bryn Mawr economist Richard B. Du Boff explains, “The function of Social Security is one of social insurance. We pool our resources, and make transfer payments to ourselves at appropriate stages of the life cycle.”9 In the last century we addressed old age, when too many Americans suffered from impoverishment. Today, compelling needs have emerged earlier in our lives when we are raising our families. A transformed labor force faces policies that have not adequately changed to compensate for the massive entry of women into paid work. Our Social Security system has long been thought of as providing a measure of financial security in return for a lifetime of work. What work is a more vital contribution to the future of our country than raising children well?


1 Steve Farkas, Ann Duffett and Jean Johnson, Necessary Compromises, (New York: Public Agenda, 2000), p. 13.

2 Ruth Wooden and Nancy Rankin, What Will Parents Vote For? (New York: National Parenting Association, 2000), pp. 2-3. What Will Parents Vote For In New York?, the poll conducted by Charney Research for the National Parenting Association in June 2001 found views similar to the national survey. In the state poll 31% of mothers and fathers surveyed said “balancing work and family” was their biggest daily challenge compared to 22% each for “their child's education” and “instilling moral values,” the next most often mentioned concerns.

3 Public Agenda's 2000 survey found that if they had to choose, “Twice as many parents of children 5 or under say policy makers should concentrate on making it easier and more affordable for one parent to be home during a child's first few years (62%) rather than on improving the quality and affordability of outside-the-home child care (30%). For a fuller discussion see Farkas, Duffett and Johnson, Necessary Compromises, p.28.

Among the policies which drew the highest levels of support in national surveys of parents conducted for the National Parenting Association in 1996 and 2000 were proposals to ease work-family pressures by decreasing work hours.

Proposal Percent strongly/
somewhat favor
2000 Survey 1996 Survey
Tax incentives to encourage family-friendly policies by employers,
such as benefits for part-time workers and flexible working hours
90 90
A law to ensure 24 hours or three days paid leave annually
for family needs
84 87
Letting workers take time off instead of extra pay for overtime 78 79


4 “No German children? Then pay up,” The Economist, April 7, 2001, p.54.

5 Median earnings of full-time, year-round U.S. workers in 1999 were $36,476 for men and $26,324 for women according to the U.S. Census Bureau Current Population Survey.

6 New York City's Teaching Fellows program, created in 2000 to draw young professionals from other fields into teaching, is a prime example of an “on-ramps” concept. The program gives recruits accelerated, intensive pre-service training.

7 Wooden and Rankin, p. 3.

8 James Dao, “Gore Proposes New Benefits For Parents and Widows,” New York Times, April 5, 2000, p. A19.

9 Richard B. Du Boff, in a letter to the editor, New York Times, August 19, 2001, p.WK12.

*Nancy Rankin is past Executive Director of the National Parenting Association and former Director of Research and Programs.

This article will be published in Taking Parenting Public, ed. Sylvia Ann Hewlett, Nancy Rankin, and Cornel West (Lanham, Md.: Rowman & Littlefield, forthcoming). Copyright © Rowman & Littlefield. All rights reserved. No reprints or reproduction without permission. Brief quotations must acknowledge original source.

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