Megatrends and the Future of Social Protection

Valerie Frey

Raphaela Hyee

Jasmin Thomas

Accompanying demographic transitions and the evolving labour force are changes in how – and with whom – people live. Though women have made tremendous strides in working for pay outside the home (Chapter 3, (OECD, 2023[1])), they still experience a motherhood penalty in wages and labour force participation due to unpaid childcare obligations, and they face a higher poverty risk than men in working age and old age. Going forward, at least in the short run, women will likely also continue to bear a significant share of the burden of societies’ impending unpaid elder care demands.

While unpaid work persists and expands, the structure of families is shifting away from married couples towards more diverse family types, including unmarried two‑parent households, adults living alone, and single‑parent households. These changes have implications for socio‑economic outcomes: for example, single‑parent households, often headed by women, face higher poverty risks than two‑parent households across OECD countries. Governments should therefore continue to monitor unpaid care obligations and reassess governments’ role in publicly supporting childcare and long-term care infrastructure, to ensure that all people can achieve economic security.

This chapter explores the pressure of childcare and growing eldercare demands on unpaid work obligations (Section 4.1), the shift away from two‑parent households in OECD countries (Section 4.2), and the rise in single‑adult households (Section 4.3), closing with a discussion of the implications of these changes for social policies (Section 4.4).

A historic, ongoing and likely future barrier to gender equality is “traditional” family norms around unpaid work. Throughout the world, gender inequalities in workforce participation, hours, pay, unpaid work and household responsibilities increase when women become mothers. Looking ahead, obligations around childcare are likely to combine with growing obligations around eldercare, preventing certain groups – particularly women – from engaging fully in paid work. Women with both childcare and eldercare responsibilities are often referred to as “sandwich caregivers” (Lei, Leggett and Maust, 2022[2]).

Although women are increasingly likely to be in the labour force (Chapter 3), the gap in the employment rate between mothers of dependent children and women without dependent children remains remarkably persistent (Figure 4.1). Looking at labour force inactivity, on average across 27 EU countries, 26% of inactive women aged 25‑54 years report that their main reason for not seeking work is to care for children or adults with disability;1 among men, only 4% point to care obligations as their main reason for inactivity.

Even after decades of public investments, the supply of good-quality, affordable childcare and out-of-school hours (OSH) care is still insufficient to meet demand in most OECD countries, and mothers and grandmothers fill the bulk of this gap. Fewer than four in ten young children (under the age of three) are enrolled in formal early childhood education and care (ECEC) across OECD countries (OECD, 2023[3]).

When mothers do engage in paid work, the so-called motherhood penalty in many countries results in lower working hours (Figure 4.2) for mothers than for women without dependent children (OECD, 2019[4]). Mothers also garner lower earnings than women without children (Budig and England, 2001[5]; Budig and Hodges, 2010[6]; Correll, Benard and Paik, 2007[7]; Gough and Noonan, 2013[8]) – a result that holds even after accounting for selection effects into motherhood, i.e. a woman’s decision to become a mother (Miller, 2009[9]). The combination of paid and unpaid work hours can impede mothers’ work-life balance and hamper their career advancement.

Of course, childcare is not the only unpaid care obligation in OECD countries. Unpaid care covers an important share of long-term care needs. These demands are expected to grow in the future alongside increases in life expectancy (OECD, 2023[10]; Pinkus, Jensen and Borsch-Supan, 2023[11]). Recent OECD estimates suggest that employment in long-term care (as a percentage of total employment) would need to rise by 32% over the next ten years to meet the expected increase in demand for caregiving (OECD, 2023[10]).

Unpaid2 long-term care is often provided by family and friends, acting both as complement to and a substitute for formal care. In 2019, around 13% of people over 50 years old provided some type of unpaid care at least weekly (OECD, 2021[12]), and around 7% provide care every day (Figure 4.3). This estimate includes all forms of unpaid care – including childcare, care for people with a disability, and care for elderly people. As with all caregiving activities, unpaid caregiving is highly gendered, with women representing over 62% of people aged 50 years or over (in a comparison of 25 OECD countries) providing daily unpaid care Figure 4.3). Over half of those providing unpaid care are providing this care to their spouse or their parents.

Yet despite these considerable (unpaid) commitments of time and effort, 32% of people who suffer from limitations on daily activities report unmet care needs in a study of seven EU countries (Pinkus, Jensen and Borsch-Supan, 2023[11]). Rates of unmet care needs are higher among people living alone.

The extent to which unpaid caregiving reduces labour supply depends largely on the type and frequency of the care required. Across countries, caregiving tasks tend to be divided by gender (OECD, 2021[13]; OECD, 2017[14]), with older women more likely to perform tasks that are considered stereotypically ”feminine”, such as housework (e.g. meal preparation, house cleaning, laundry) and personal care, and scheduling and co‑ordinating appointments. Older men are more likely to perform tasks traditionally associated with men, such as house maintenance and outdoor work (Arriagada, 2020[15]). Unpaid caregiving has the most negative effect on labour supply if it is provided often, e.g. on a daily basis or over 20 hours per week. Less frequent unpaid caregiving has weaker effects on labour supply (Ciccarelli and Van Soest, 2018[16]; Carmichael and Charles, 1998[17]).

Unpaid caregiving plays a critical role for elderly people and people with disability because the public provision of long-term care is insufficient in most OECD countries. The total cost of formal long-term care can be very high – around 1.5 to three times an older person’s median income, according to an OECD study of long-term caregiving in Europe. The same study found that in at least ten EU countries, older people with severe care needs would on average have to spend more than half of their income to pay for home care even after receiving public benefits and services for long-term care (OECD, 2023[18]).

Most children still live in households with two parents. Over 80% of all children in most OECD countries, ranging from around 70% in the United States to 90% and over in Türkiye, Switzerland, and Greece (OECD Family Database), live in a two‑parent home. Indeed, the share of single‑parent households has been stable at around 16‑17%, on average, over the past two decades (Figure 4.4).

The biggest shift in families’ living arrangements has been the move from cohabitating married couples or couples in a registered partnership to unmarried, cohabitating couples. The share of children living with their (unmarried) parents increased from below 10% across 16 OECD countries with available evidence in 2005 to 17% in 2018. Indeed, children are more likely to be raised by two parents in the same home today than they were two decades ago – but, on average, the probability that these parents are married or in a civil union has gone down. The share of children living with their unmarried parents was highest in Estonia (32%), but also Slovenia, Poland, Iceland, France, Bulgaria and Sweden had shares of over 25%. The share of children living with unmarried parents was lowest in Greece and Türkiye (around 1%) but also the United States (5%, Figure 4.4).

On average across OECD countries, 17% of children live in single‑parent households, with rates highest in Belgium, the United States, Latvia and Lithuania (where around one in four children live in a single‑parent household). The share of children living with just one parent was lowest in Türkiye, Switzerland, and Poland (fewer than one in ten children). With only one adult available to earn a living and to care for children, children living in single‑parent homes face the highest risks of poverty and social exclusion (Miho and Thévenon, 2019[19]). As shown below (Figure 4.6), 44% of single parents with dependent children were at risk of poverty or social exclusion in 2022, compared to 16% of households with two adults and one dependent child and 17% of households with two adults and two dependent children.

Despite the rising incidence of unmarried couples raising children, fewer than two‑thirds of OECD countries allow non-married couples to register their partnership, and many countries continue to provide tax-benefit advantages only to married couples (Miho and Thévenon, 2019[19]) (Section 4.4).

Over time, there has been a strong shift toward a greater number of one‑person households across OECD countries. In the United States, for example, 28% of all households were one‑adult households, up from 8% in 1940 (U.S. Census Bureau, 2023[20]). There are similar patterns across the OECD, including in the European Union (Eurostat, 2023[21]), Canada (Statistics Canada, 2022[22]), Australia (Australian Institute of Family Studies, 2015[23]), and Korea (Park and Choi, 2015[24]).

This is driven, in part, by a composition effect associated with population ageing. Older individuals, who make up an increasing share of the population, are more likely to live alone than younger individuals as they become widowed (Figure 4.5). Younger people are also increasingly likely to live alone, however. Among the 27 OECD countries with data available over the past decade, the share of the population living in one‑person households rose across the entire age distribution in many countries (Figure 4.5, Panel B).

Without the protective effects of a second earner’s income, and unable to benefit from consumption economies of scale, single‑adult households face a relatively high risk of poverty across OECD countries (Figure 4.6). In EU countries, for example, about one in three one‑adult households is at risk of poverty or social exclusion. Among one‑adult households, single‑parent households (i.e. those with children) are most at risk of poverty or social exclusion.

One way in which one‑adult households can be disadvantaged in social protection systems is social housing. In Ireland, the supply of social housing “does not reflect the type of people on waiting lists,” with mostly three‑ and four‑bedroom houses being acquired or built by local authorities, despite the fact that single people account for the majority of those on waiting lists (Burns, 2018[25]). The OECD Affordable Housing Database indicates the different priority groups that have been identified for social housing across countries, and single adults are not usually a priority group unless they meet other criteria, such as disability (OECD, 2023[26]). At the same time, there is an undersupply of social housing in every OECD country, and housing authorities have considerable discretion in determining who is housed.

In the area of long-term care, the longstanding deficit in public support for elderly caregiving is keenly felt in single‑adult elderly households, which report higher rates of unmet care needs in a study of seven EU countries (Pinkus, Jensen and Borsch-Supan, 2023[11]). Older people living alone may be more likely to rely on unpaid care from working-age family members – with implications for labour supply.

As populations continue to age in all countries across the OECD, care needs will increase. The projected need for a 32% increase in the formal long-term caregiving workforce (as a percent of total employment) over the next decade, to meet impending care demands, is a challenging target (OECD, 2023[10]). In the absence of large investments in formal long-term care, this care work will need to be provided by family, friends and neighbors. Yet declining family sizes and increased geographical mobility – leading to greater distances between family members – suggests there may be fewer people to provide unpaid care in the future (OECD, 2021[12]).

In addition, access to affordable high-quality childcare and out-of-school hours care remains limited in most countries (Frey, 2024[27]). This is a major barrier to work for many working-age people, especially women, at a time when the working-age population is shrinking and tapping the full potential of the workforce is essential. If long-term care or childcare supports are inaccessible or unaffordable, these factors could potentially coalesce to impact women’s ability to work outside the home, force shorter working hours, lead to burnout and stress, and worsen physical and mental health (Colombo et al., 2011[28]).

These simultaneous demands around childcare giving and long-term caregiving for adults highlight the increasing need for investments in the formal care economy, including better pay and work conditions for care workers (OECD, 2023[10]), and in social programmes that support unpaid caregivers (OECD, 2023[10]). Indeed, OECD (2021[12]) finds that fewer people provide daily care in countries with stronger formal long-term care systems, suggesting a substitutability between unpaid and paid care.

With an increasing share of children growing up in families with unmarried parents, social policy should consider approaches that would help create a more level playing field between cohabitating and married couples. Countries should re‑assess the rationale behind offering tax advantages to married couples, regardless of the presence of children. Many OECD countries still confer sometimes substantial tax advantages upon married couples regardless of children, e.g. Czechia, France and Germany. In Belgium, Greece, Finland, Iceland and Italy, cohabiting couples are eligible for the same tax treatment as married couples only if they have children together (Miho and Thévenon, 2019[19]).

Unmarried partners also often are not entitled to survivor benefits, or alimony in the case of separation. This usually disadvantages women, as they are often the financially weaker partner and more likely to be the primary caregiver of children. As discussed in Chapter 3, stronger female labour force attachment will also mean that women will increasingly have poverty-protecting pension entitlements of their own.

The increasing incidence of one‑adult households mean that a higher share of the population lacks the protection of a second income. Access to adequate social protection is therefore all the more important. From a social protection funding perspective, the absence of private risk pooling may mean increasing reliance on public income support. Older people living alone also likely have even greater need for formal long-term care support, as otherwise they may need to rely on working-age family members.

Other family types may also experience barriers to access to social protection programmes or lack sufficient support, including multigenerational households, reconstituted family (stepfamilies) households, three‑parent households and same‑sex-parent households. Multigenerational households, for example, may be constituted out of necessity or to give or receive care or as a response to housing shortages. To ensure that social protection systems treat all families equally as societies and economic conditions change, policies and programmes must be regularly reviewed to adapt to emerging family types and household arrangements.

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