Employment Gaps, Fertility Rates and Tax Rates

From The Economist: A study by Kevin Daly of Goldman Sachs has measured the gender employment-rate gap (the male employment rate minus the female one) in several countries. Some findings:

1. In Spain and Italy the employment gap is over 20% (low rate of labor force participation for women), in contrast with Sweden's 4% (almost equal participation rate for men and women), see top graph above.

2. Increasing the rate of female labor force participation could increase economic growth by as much as 13% in the Euro-zone.

3. Higher female emploment does not reduce fertility rates: in countries with a smaller gap (like Sweden, Denmark, Iceland and even the U.S.), women tend to have more babies (see bottom chart above) than in higher gap countries (like Italy and Spain). (MP: This surprises me, I would expect countries like Spain, Greece and Italy with low labor force participation rates for women to have higher fertilty rates, not lower).

4. The tax burden on second earners explains some of the employment gap. In both Spain and Italy second earners pay considerably more tax then their partners do, whereas in Sweden the rate is the same.