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The underrated economic benefit of parents who work less

Family-friendly policies could help boost the economy, White House says. (AP Photo/The Florida Times-Union, Bob Mack)
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The term “family-friendly” in American culture stirs images of Old Navy sales, theme park Groupons and child-protected basement screenings of "The Lego Movie." The White House is striving to change that soft connotation, connecting family-friendly workplace policies to a stronger labor force and economy. It comes just in time for election rhetoric: as the Upshot’s Nate Cohn points out, "the parent agenda" appears to an emerging focus for the Democratic party.

Work-life balance boosts businesses, according to this year’s Economic Report of the President, published Thursday. The annual report devoted 45 pages to family matters, which, the authors argue, will increasingly dictate America’s economic health as parental roles break and transform.

Key points below:

Help moms, help the economy

Let’s kick off the highlights with a number: Closing the male-female employment gap would raise GDP by 9 percent, the Council of Economic Advisors estimates. Growth starts by understanding what’s still limiting women’s labor force participation -- even as they outpace men in college enrollment.

A century ago, only 24 percent of American women worked outside the home. Today, the majority do.

About 63 percent of mothers with small children -- many of whom are family breadwinners -- go to work, compared to 31 percent in 1970, according to the CEA. Over the same time, male labor force participation has dipped.

“These gains in women’s labor force participation, as well as their increased educational attainment, have translated into large income gains for American families and have benefited the U.S. economy overall,” the White House report said. “Essentially all of the income gains that middle class American families have experienced since 1970 are due to the rise in women’s earnings.”

The new family reality: both parents work

Women’s earnings remain stifled by a variety of forces largely tied to being a parent. High child-care costs, stingy leave policies and inflexible work schedules, for example, compel highly educated female workers to settle or quit.

Today, both parents are employed in 6 out of every 10 households with children, up from 4 out of 10 in 1968, the White House report shows. And work-life balance is increasingly important to dads.

A common dilemma, no matter your gender: Do I choose the right job for my talents? Or for my family?

Family benefits actually help companies too

Companies with policies that make parenting easier tend to snag and keep the best workers. (Look to Google or Facebook, ever engaged in a benefit one-upping war, for evidence.)

Nearly 50 percent of working parents reported turning down a job offer because it wouldn’t make sense for their families, according to the White House report. Among the perks lacking: Schedule flexibility and paid leave.

More than a third of American workers don’t get sick leave. Paid parental leave isn’t an option for millions. (Learn more about the disparities of paid leave here.)

And only 27 percent of businesses surveyed by the Families and Work Institute for the National Study of Employers allowed most  employees to set flexible hours.

“These practices can benefit employers by improving their ability to recruit and retain talent, lowering costly worker turnover, and minimizing loss of firm specific skills and human capital,” the White House authors wrote, “as well as by boosting morale and worker productivity.”

The benefits are especially attractive as both mothers and fathers in dual income households report more and more work-family conflicts:

Can family benefits lead to higher profits?

Of course, providing them is expensive. But research suggests family-friendly perks could be solid investments.

Investors ostensibly care about offspring. Fortune 500 companies that implemented new work-life balance initiatives saw, on average, better shareholder return, according to a 2004 study that tracked 241 of the announcements.

“Such evidence indicates that flexible practices boost investors’ perceptions of the value of a firm, which may derive from their beliefs about the impact of the policies on worker productivity,” the White House report authors wrote.

Companies with more women in top management positions, meanwhile, tend to perform better, according to Catalyst research. Though causation is hard to prove, gender diversity is thought to drive innovation.

And sick leave could prevent your entire staff from getting wiped out by the flu. Cheers to productivity!