Care earnings in the United States and 24 European countries: The role of social policy and labour market institutions

Care occupations are gendered and remain relatively poorly paid, particularly in the United States. Prior research on the ‘care penalty’ primarily points to individual, relational, and market-valuation factors in explaining the relative earnings of care workers. This study integrates these explanations with a comparative institutional perspective. Using higher-quality data and methods than previous comparative research in the field—that is, harmonized micro-data from the Current Population Survey and EU-SILC from 2005 to 2016, country and year fixed effects models, and a counterfactual analysis—we find that national variance in labour market and welfare state institutions explains most of the difference in the relative earnings of reproductive care workers between the United States and European countries. Higher rates of collective bargaining coverage, stronger employment protection and welfare state spending contribute to higher relative earnings for reproductive care occupations, and lower relative earnings for high-status nurturant care occupations. Differences in the relative earnings of care workers appear to be mostly a construct of social policy and labour market institutions rather than individual, relational, and market-valuation factors