Women’s Economic Activity vs. Birth Rate Increase: Achieving Balance

At the same time, women’s employment is negatively associated with the fertility rate (Behrman, 2022). While the birth of a child has almost no impact on men’s employment, 40% of women in European countries state that having children affects their careers. After the second child, 47% of women reduce their working hours; after the third, 70% leave their jobs (Pailhé, 2006). Therefore, a woman’s decision to have a second or third child is potentially a choice that significantly complicates career advancement.

To enable women to both pursue their careers and have children, appropriate family policies supporting the harmonious balance between work and childcare are essential. Among the most common are caregiving support policies. Table 1 examines factors contributing to increased economic activity among women and planned policies aimed at increasing birth rates in Ukraine’s Demographic Strategy. The good news is that the latter largely aligns with the former.

A large number of empirical studies in OECD countries provide evidence on the effectiveness of policies for the provision of childcare services (kindergartens, crèches, etc.). However, such services must meet several criteria: sufficient availability, financial and territorial accessibility, and the quality of education in preschool institutions (Ünver, 2018). According to research, one-time payments have a significant but short-term positive impact on fertility and a negative impact on women’s employment.

Noteworthy also is the design of parental leave policies. Research demonstrates that after taking leave longer than 12-16 months, women have fewer chances for career advancement upon returning to work (Duvander, 2011, Rønsen & Sundström, 2002, Ruhm, 1998). Conversely, parental leave shorter than a year positively impacts return to work and does not diminish mothers’ career prospects (Kunze, 2022, Lalive&Zweimüller, 2009). Germany’s experience is illustrative, where parental leave gradually extended from 7.5 to 37.5 months during 1985-1995, negatively affecting mothers’ wages and their likelihood of returning to full-time work (Ejrnæs & Kunze, 2013). In Austria, extending leave from one to two years in 1990 significantly reduced the percentage of women returning to work (Lalive&Zweimüller, 2009).

The average duration of parental leave in OECD countries is 67.5 weeks, approximately 14 months. Potential reasons for the negative impact of lengthy leave include women maximizing its duration, thereby delaying their return to work. Prolonged absence from work can lead to the loss of specific skills or the inability to acquire skills obtained by colleagues. Consequently, a woman’s competitiveness within the team diminishes, and reintegration into the work context becomes more challenging. Conversely, shorter leaves need to be supplemented with policies that provide access to high-quality childcare services, such as kindergartens. In the absence of such services and with short leave periods, some women may be compelled to quit their jobs to care for their children independently.

Important for gender equality are policies that promote a more equal distribution of unpaid work between men and women. According to global data, women spend, on average, 2.8 hours more per day on caregiving and household chores compared to men. The expectations placed on women to bear and raise children while also participating in the workforce create a “double burden” (Van Corp, 2013). One of the policies addressing this issue is “quotas” for fathers during parental leave. Such leave is most common in Scandinavian countries, where 1-3 months of paid parental leave are specifically designated for fathers. If fathers do not take this leave, it cannot be transferred to another caregiver, resulting in its loss. Evaluations of these policies in Sweden and Denmark have shown a positive effect on mothers’ wages, reducing the “motherhood penalty” (Andersen, 2018, Johansson, 2010). In Quebec, Canada, similar policies have led to a five percentage point increase in the likelihood of women returning to full-time work (Dunatchik, 2020).

In the context of women’s employment, it is essential to consider gender segregation both vertically (representation of women in leadership positions) and horizontally (employment of women across different sectors). For example, there are more men in managerial positions in the industrial sector and more women in the education sector. Among the policies addressing vertical segregation, corporate quotas for women in top positions are widely adopted. In 2022, the European Union adopted a Directive requiring companies to have a minimum of 40% women on non-executive boards by 2026. Reducing horizontal segregation involves initiatives such as quotas for girls pursuing careers in STEM fields, developing qualification programs for women entering traditionally male-dominated professions like carpentry, electrical work, and driving, and promoting such female role models.

In our opinion, obtaining a profession in a highly paid field typically dominated by men may incentivize women to return to work sooner after maternity leave. Employers may also seek to retain valuable female employees by offering them flexible work schedules.

The number of hours of paid work performed by women often significantly differs from that among men. Women more frequently work part-time, which, on the one hand, allows them to balance family and work responsibilities. On the other hand, it often does not provide them with sufficient earnings to ensure economic independence and reduces chances for career advancement. The idea of reducing the overall working hours is gaining popularity, which could help in combining work and family responsibilities, but it remains challenging to implement. Currently, the most widespread practice is promoting flexible and remote work arrangements. It would be beneficial to offer the option of flexible working hours to men as well. This would allow for a more equitable distribution of family responsibilities between partners. However, it is necessary to analyze whether such an approach might lead to a decrease in income for all families with children compared to those without children.

Finally, gender stereotypes and societal attitudes toward working mothers can significantly influence the outcomes of implemented policies. For instance, in some cities in Western Europe, despite having full coverage of childcare facilities, women’s economic activity remains low. Conversely, in other cities with low childcare provision, more women are employed (Jensen, 2017). If a country has established norms that dictate mothers should primarily care for children while fathers are the primary breadwinners, implementing policies aimed at gender equality should be accompanied by active efforts to change cultural beliefs.

What about women’s economic activity in Ukraine?

According to calculations by the Center for Economic Strategy (CES), the labor market in Ukraine has been gradually recovering since the beginning of the full-scale invasion, and the number of vacancies increases. In February 2023, the number of open vacancies reached 60% of the pre-war period, which, according to Work.ua, marked the peak of labor market recovery. However, there are not as many responses to job openings, and according to an NBU survey, 25.6% of employers have difficulty finding qualified workers. Statistics from Work.ua for June 2024 show that the ratio of open vacancies to resumes has nearly equalized — 64,000 and 79,000, respectively. The shortage of personnel is exacerbated by the loss of population due to Russia’s aggressive actions — occupation and deportation from the occupied territories, migration of 5.9 million people abroad, of whom 80% are women and children, and mobilization for the Defense Forces. Official estimates indicate that Ukraine’s population decreased by 5.7 million in 2023 compared to 2022, totaling 36.3 million people, while on territories under Ukrainian control, it amounted to only 31.5 million people.

In 2021, the economic activity rate of women aged 15 and above in Ukraine was 47.8%, whereas, for men, it was 62.9%, indicating a 15 percentage point difference favoring men (estimated by the IOM methodology).

Over the 5-year period from 2017 to 2021, the unemployment rate among women aged 15-70 increased by 2.5 percentage points, likely influenced by the pandemic, while among men, it decreased by 1.5 percentage points (see Figure 2). In 2022, the proportion of employed women increased by 1%, attributed to the outflow of male workers and subsequent changes in the workforce structure at enterprises. Research on the labor market in 2022-2023 highlighted successful cases of retraining female personnel as welders, drivers, and forklift operators to fill positions previously held by men. 

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(b)

Women’s participation in the labor market varies by sector. In 2021, women constituted a minority (28-35%) among workers in agriculture, industry, transportation, and warehousing, while they predominated (75-85%) in sectors such as postal and courier activities, healthcare, education, and the operation of libraries, archives, and other cultural institutions. Their share across sectors has not significantly changed since 2015.

However, regardless of the economic sector, women earn less than men except in the administrative and support services sector, where the wage level is nearly equal. This difference may be due to vertical segregation (men more often occupy managerial positions), horizontal segregation (if certain jobs are better paid and men more frequently hold these positions), or the "motherhood penalty" — lost career opportunities due to time out of the labor market for childbirth and childcare. This issue requires further detailed research so that Ukraine can direct policies to address the reasons why women earn less than men.

The Center for Economic Strategy conducted a study in 2019 and found that the main reasons for women's unemployment in Ukraine are the desire to take care of the children on their own (28%) and the lack of alternative childcare options such as kindergartens, nannies, or relatives (29%). The Demographic Development Strategy also mentions the issue of insufficient childcare services. According to the Strategy, this problem leads to a significant difference in the employment rates of women with young children (aged 3-5 years) compared to women without children, specifically 71.1% employment without children versus 51.5% with children. Today, this problem has been exacerbated due to the lack of available shelters in many kindergartens.

Practices to increase women's economic activity in other countries

The structure of the economy in Ukraine is predominantly services-oriented, and the birth rate is low, similar to that of developed countries. Therefore, for comparison, we primarily selected European countries. Additionally, we considered Israel due to its experience with ongoing conflict.

Policies related to women's economic activity in Ukraine

In 2023, the Ukrainian government approved the National Strategy for Bridging the Gender Pay Gap, aiming to reduce the gap from 18.6% to 13.6% by 2030. The Strategy for Gender Equality in Education until 2030 was also endorsed. When developing policies to implement these strategies, Ukraine aligns with the Council of Europe Gender Equality Strategy for 2024-2029. Policies related to women's economic activity primarily concern maternity leave, childcare services, entrepreneurship support programs, and more.

What else can Ukraine do?

The Demographic Strategy project proposes solutions that do not contradict women's economic activity and have the potential to simultaneously increase both birth rates and women's employment (see Table 1). Since childcare services are one of the most important factors enabling mothers to enter the workforce, it is crucial to detail the strategy's goals regarding this aspect. In addition to the financial and geographical accessibility of childcare services, it is critical to have the possibility to access these services until the end of the working day and to have nursery groups for children up to three years old.

Another positive aspect of the strategy is its focus on acquiring competitive professions, often considered "male-dominated." Training girls in technical occupations and facilitating their first experience in these fields before childbirth will increase their chances of returning to these professions. This approach includes financial incentives and employer readiness to adapt to the needs of highly skilled female workers. 

International experience shows that paid parental leave lasting up to 1-1.5 years in addition to childcare facilities is most favorable for working women. This policy encourages mothers to return to work and remain competitive because, during this period, women are less likely to lose important skills, making it easier for them to reintegrate into the workforce. Various countries also implement flexible work schedules. For example, Austria and Israel see this as a positive incentive for balancing family and work duties, while Scandinavian countries advocate for full-time employment for women, thereby enhancing their competitiveness in career opportunities alongside men. Targeted programs such as job search counseling, mentoring, and support for women in business, which are stable and accessible to most women, are important policies that Ukraine can adopt.

Improving the quality and accessibility of childcare services, especially for children up to 3 years old

In March 2023, Parliament adopted as a basis a bill on preschool education. The bill proposes improving the territorial accessibility of preschool institutions and reducing queues for kindergartens. A significant change that could affect women's economic activity is opening nursery groups for children aged three months to three years. The availability of early childhood care can allow women to avoid prolonged maternity leaves and return to work relatively quickly without losing career opportunities.

Increasing fathers' involvement in caregiving tasks

Following the example of Scandinavian countries and in accordance with the EU Directive on work-life balance for parents and carers, it is recommended that at least two months of paternity leave be introduced exclusively to fathers. Such leave can encourage fathers to participate more in caregiving responsibilities. However, considering that a significant number of men are currently defending Ukraine due to war conditions, this proposal would be more appropriate for the post-war period.

Implementing counseling and job search assistance programs for women reentering the workforce

Such programs could be provided not only by the Employment Center but also by recruiting agencies with appropriate funding. These programs should include career counseling and coaching services, market orientation activities, workshops for developing soft skills, and networking opportunities with potential and supportive employers.

Implementing programs to encourage women to pursue careers and gain experience in high-paying and high-demand fields

According to the Ministry of Economy forecasts, the demand for professionals in the information and telecommunications sector is expected to grow by 2.2 times by 2028 compared to 2022. There will also be increased demand for engineers, technical specialists, STEM professionals, and energy experts. These fields in Ukraine offer the highest salaries but currently have a gender bias in favor of men already from the stage of professional training. In order to ensure women have opportunities to develop in these sectors, it is necessary to promote educational opportunities among girls, encourage their enrollment in programs in these fields, possibly through quotas, and implement support programs during their education and first job search. Promoting corporate policies that allow women to receive training in technical specialities and internships within companies can be a win-win situation for both businesses and the state. Due to the ongoing war and the outflow of male workers, there is already a demand for retraining women to fill vacancies in technical fields. 

Implementing programs for consulting and financial support for women entrepreneurs

 The experience of the "Own Business" program has demonstrated the demand among women for such support and their interest in entrepreneurship. It is crucial to continue and expand similar programs, ensuring accessibility for women of various socioeconomic backgrounds. Efforts should include initiatives that foster support networks and knowledge exchange among women entrepreneurs. Additionally, providing separate grant support for single mothers would be beneficial.

Conducting informational campaigns aimed at changing gender stereotypes

Such campaigns should have support at the highest levels of the country and demonstrate alternative models of role distribution within families, where partners equally share caregiving and household tasks while supporting each other's professional development. The campaign should also promote women entering "non-traditional" professions and highlight their advantages.

Conclusions

Due to prolonged demographic changes and the war, Ukraine faces critically low birth rates alongside a labor shortage. Addressing this challenge requires balancing these dimensions while considering gender equality perspectives. It is essential to work on changing gender stereotypes, encouraging and supporting women in traditionally male-dominated professions, and rethinking policies to help working parents.