Brian Fallow: Clark's appeal to women - Your economy needs you, yes, you

It seems to be open season on young mothers. First we had Opposition Leader Don Brash at Orewa getting tough on people on the domestic purposes benefit.

Then, yesterday, Prime Minister Helen Clark in her state-of-the-nation speech held out the tantalising prospect of a 5 per cent lift in per capita gross domestic product - if only we could get women's workforce participation rate up to the level of the top five developed countries.

But is there a small army of idle women lounging around with their feet up eating bonbons, who need to be chivvied or coaxed into the workforce?

The participation rate is the proportion of people of working age who are in the workforce, meaning they are either employed or actively seeking work.

For the two sexes combined, this country's participation rate is high by international standards, as Clark acknowledged. But, she said, our women's participation rate lagged particularly for those aged 25 to 34.

That may be so for that age group, but for women of working age generally (15 to 64) we are above the OECD average, with two out of three working.

True, in the top five OECD countries by this measure - Denmark, Iceland, Norway, Sweden and Switzerland - about three women in four work.

But it would not be easy to match that. Women in Nordic countries tend to have fewer children than their New Zealand counterparts and their governments spend vastly more on childcare and early childhood education. The OECD says such spending ranges from 1.2 per cent of GDP in Iceland to 2.6 per cent in Denmark.

Even with the measures announced in last year's budget, the amount New Zealand spends on such support is not remotely in that league.

Still, it all helps. Clark said the last October's boost to childcare subsidy levels triggered a fourfold increase in the number of subsidy claims granted in just the first three months.

The Government is looking at options for boosting home-based childcare and at British plans for a school-based "dawn to dusk" (8am to 6pm) childcare programme.

She said forthcoming reforms to the benefit system should also help to boost women's participation in the workforce.

Higher pay rates in sectors dominated by women would not hurt either.

Underlying all this is a recognition that, with unemployment at 18-year lows and a global labour market beckoning skilled Kiwis, the labour supply - for both skilled and unskilled workers - has become a significant constraint on economic growth.

Immigration Minister Paul Swain will be looking for ideas from employers on how to attract skilled expatriates to return.

In the end, though, the gains from measures to boost female participation and reverse the brain drain are likely to be incremental at best. No silver bullets there.

So as well as attracting more hands to the pump, we need to build a more efficient pump: boosting productivity, investment and savings.