to think it is an outrage that when I go back to work after a second baby it is CHEAPER for me to get a nanny to look after them both than put them the nursery up the road!!

[sophiebbb]

I told my dad that the other day and he was flabberghasted.....

PS I live in London

jellybeans - I certainly think that we shouldn't be thinking about the common good in our decision to work or not.

Are you sure the nanny will be cheaper? I work 3 days a week and at the height of my childcare costs I was paying on average £650/month. Granted this was 3 years ago and I had a 3 year gap which meant that I never paid two full sets of fees. I always had the nursery grant reduction in there. And because I had 5 sessions included in 3 days it was quite a significant difference.

I am certainly not thinking about the common good in making my decision - is anyone? - I am thinking about the slimness of the chance of me ever getting back into my career if I leave it for a few years. But deterring women from working doesn't make economic sense, either.

anna, thanks for that. I appreciate the tax systems are different.

Why is the cost of the employee to the employer is relevant? In UK, as you probably know, we only take the last 3 into account.

38 take home based on a 100 salary is quite a high rate of tax/social security - 62%, compared to 40% in UK - allowing of course for that fact that yours is just an example.

Presumably the higher rate tax payer is also taxed at the same high-ish rate?

In our case, I appreciate if I was a lower income tax payer (22%) under the current UK system, I would be discentivised if I found out I had to pay 40% or 62% instead. But I currently already pay the highest rate (ie 40% or 62% in your example) and I am not disincentivised to work. So not sure why a high earning French woman is disincentivised as you describe, as opposed to a lower earning French woman if she were under the UK system.

Of course, I am comparing apples and oranges. If it is too complicated to transpose, don't bother

Kathy - I think that many people are influenced by the ambiant culture into thinking that it is "better" for society that they should work, that they are a more valuable member of society the more they earn and that they feel like lesser beings in other people's eyes if they do not work. So in that sense, yes, I do think people think about the common good and not about what they really want and what really works for their family.

I, like you, am entirely influenced by my own bank balance and general long-term well-being .

yes, good point about people feeling like a more valuable member of society for working.

I am entirely influenced by how annoying I find children after being with them for 4 or 5 days on the trot

Why is the cost of the employee to the employer relevant?

Well, when you cost your employer 150 and you only take home 38 (less childcare and transport), your employer thinks that you ought to give him total devotion. You, however, actually take home net net about 15 ie 10% of what your employer is shelling out. That small sum of money that ends up in your pocket isn't a huge incentive to sweat your guts out.

That's what I mean by an incentive disequilibrium.

Anna: "I, like you, am entirely influenced by my own bank balance and general long-term well-being."

We are the same creature!

Though I do consider greater good issues in thinking through issues of what policies I want the current and future government to support for my personal benefit, whether direct or indirect. As you say, a lot of people ultimately vote based on their own personal circumstances.

In my example, the first earner would be paying a lot less tax than the second as he would have lots of deductions (for spouse, children, mortgage, home improvements, domestic staff/service).

It's all terribly complicated and unfair to second earners.

When voting I can be influenced by issues I feel strongly about but that are not relevant to me.

However, when deciding whether to work or not (indeed, whether to marry or not), I only see £££££££££££££££££££££££ .

Anna, I can understand a job being more demanding than is worthwhile for the pay it brings in (if employer expectations are unreasonable because of the high cost to them).

But I would not phrase it or even consider it in monetary terms of cost to the employer. I used to work in such a job - could easily be 24/7. Even then, I brought in far more than I was costing the employer in my salary (and rent etc) otherwise I would be out on my ear. Even then, I don't know exactly what my cost to my employer was or even factored that into my decision to work, beyond the expectations of my working hours.

If both parents are taxed at the same high rate of tax, then it is just a ... high rate of tax all round? What is the disincentivising effect on working women (2nd income), as opposed to men (first income)?

I see, anna, cross-posted. Those are very generous deductions indeed - very unlike the UK. So if the first income earner's has more deductible childcare-related expenses than he pays in taxes, the 2nd earner cannot claim the deduction against her salary?

blueshoes - because of the deductions.

In my example, man earns 80 after social security.

He then makes all sorts of deductions for family, home improvements, domestic service and only then applies the tax rate. Depending on how many children he has, how much he pays the cleaner etc he pays much less tax.

However, the second earner has no additional deductions. So ends up effectively paying top whack on all net income after SS.

You pay taxes jointly; the break down into his and hers is hypothetical for the tax man.

But, when you analyse it, that's what happens.

yes anna, I see what you mean. A bit patriarchal (or matriarchal) IMO. The second earner might very well decide to stay at home and still use the highly subsidised childcare available - bliss! Hoping of course, it does not all end in divorce [tongue-in-cheek of course]

Hang on, anna (keep cross-posting), if taxes are paid jointly, then deductions are also treated jointly, presumably. So it is entirely possible for a first income earner to not be able to utilise all those generous deductions out of his salary, which the 2nd earner then takes the benefit of out of her salary.

It would disincentivise the 2nd earner of a high income first earner, but not that of a average income earner.

BTW, to be able to deduct any of those expenses in the first place is a dream in the UK and would be a great Incentive for both dh and I to continue working.

If you SAHM, you can't get a crèche place but you can still have a subsidised nanny, cleaner, window cleaner (providing you actually pay tax) etc and use a drop-in nursery. The system is really quite generous (designed to boost employment in the services sector), providing you like that kind of thing.

It's all extremely patriarchal and I think French women have a tough time of it, personally.

blueshoes - I specified in my example that if you DH is a high earner, then it's often not worth the second earner bothering.

Of course, most families aren't in that position.

Anna, yes you did.

As most first income earners would be average (by definition), the French tax system does not really disincentivise the majority of 2nd earners then. Ok, peace is restored in my world, French policies on women going back to work not necessarily illogical. Thanks Anna for explaining all that. Sorry for the hijack, OP.

i agree with op. when discussing if givernment should susidise childcare or not, i think its a valid point to make that mothers who don't give up their career are most likely going to cost the tax payers far less long-term. it is also highly likely that we are going to contribute to long-term sahms future pensions, so i can only see positive economic arguments for subsidising childcare.

sorry about lower case, but sick child on other arm today.

Well, one of the issues is that high earning men and high earning women are often married to one another, and those high earning couples have often done long state-subsidised studies (50% of école de commerce graduates marry an école de commerce graduate).

So - if both end up in high earning jobs, that is lovely for the economy but not lovely for the second earner. The tax system does end up pushing some of the very highest earning women out of the workplace (and there is real dearth of women in positions of power in France).

morningpaper, are you allowed to nominate yourself for quote of the week?

I find the whole conversation here really interesting and agree with lots of bits and pieces. (by the way my point has never been that that childcarers should be paid any less - it was more should we get state help).

I sometimes feel like chisigirl and take the "old fashioned" view that my child's care is my responsibility and that means that I should be looking after them (or if I fancy some childfree time or want more money then it is up to me to pay for someone else to look after them with no government help). Some days I would LOVE to look after my own children and be a SAHM and to be honest that is where it looks as if it is going because we will ultimately end up breaking even if I go out to work.

And then again, I take Kathy's point that the government have paid a lot of money to get me degree educated and so what a waste that they don't incentivise me more to go out and earn some money back for them - and to be honest there are some days that I LOVE coming into work and feel the same as morning paper!!! To be honest I also sometimes get a bit peeved that quite a lot of people get help from our government in the UK that don't deserve it and when they get it don't give anything back, yet if the government made it more financially sensible for some of us working mums to get back into the work place they would also get a return.....