Crowding Out Reciprocity between Working Parents and Companies with Corporate Childcare

• Date: 01 September 2016
• Author: Anja Feierabend,Bruno Staffelbach
• DOI: http://doi.org/10.1002/hrm.21689
• Published date: 01 September 2016

Human Resource Management, September–October 2016, Vol. 55, No. 5. Pp. 771–787

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21689

Correspondence to: Anja Feierabend, University of Zurich, Department of Business Administration,

Chair in Human Resource Management, Plattenstrasse 14, CH-8032 Zurich, Switzerland, Phone: +41 44 634 29 30,

Fax:+41 44 634 4915, E-mail: anja.feierabend@business.uzh.ch

CROWDING OUT RECIPROCITY

BETWEEN WORKING PARENTS

ANDCOMPANIES WITH

CORPORATE CHILDCARE

ANJA FEIERABEND AND BRUNO STAFFELBACH

When the government and companies invest in childcare, both do it with good

intentions. While politicians have the intention of enhancing fertility and well-

being of families, employers expect positive responses from working parents

based on the norm of reciprocity. Since industrialized countries increase public

family support year by year, the question arises as to whether this may trigger

unanticipated consequences. If both the state and companies invest in substitu-

tive services, they might unintentionally spark competition. Therefore, the aim

of this study is to examine whether public childcare may “crowd out” the reci-

procity effects of corporate childcare on working parents. In Switzerland, state

family policies vary among the 26 cantons, so we are able to compare cantons

with a high and low number of cantonal childcare services. Using survey data

taken from 414 working parents living in different Swiss cantons, we examined

whether public childcare affects organizational-related responses of working par-

ents. First, our results support the expected level of reciprocity: working par-

ents in companies with their own childcare services show higher organizational

commitment than parents in companies without this support. Second, we fi nd

evidence for a crowding-out effect: in family-supportive cantons with numerous

public childcare services, working parents’ commitment to companies with their

own childcare services is lower than in less family-friendly cantons. This fi nd-

ing reignites an old economic debate on the crowding out of voluntary private

investments due to governmental policies. ©2015 Wiley Periodicals,Inc.

Keywords: childcare services, work-family, social exchange, crowding out,

organizational commitment, public policy

772 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2016

Human Resource Management DOI: 10.1002/hrm

A driving force

behind an employer

who wants to invest

in family-friendly

services is the

business need

of attracting and

retaining talent in

order to increase

company productivity.

(Bahle, Kohl, & Wendt, 2010). Thus, as part of a

welfare state, family policy focuses on the well-

being of families by providing programs and facili-

ties to encourage and support families (Kamerman

& Kahn, 1978). As a result of declining birth rates

in Western industrialized countries and a lack

of women in the labor market (Gauthier, 2002),

more and more welfare states reenforce their pub-

lic support in order to improve the reconciliation

of work and family life. The Swiss government, for

example, started a financial impulse program in

2003 to enhance the number of subsidized child-

care services in Switzerland (State Secretariat for

Economic Affairs, 2005).

A growing body of work has investigated

whether companies adopt more or less fam-

ily-friendly services when the state is support-

ive (Den Dulk, Peters, & Poutsma, 2012; Den

Dulk, Peters, Poutsma, & Ligthart, 2010; Ollier-

Malaterre, 2010). Findings indicate that public

family support is negatively related to company

involvement in family matters. However, we

scarcely know anything about employee reac-

tions to the interplay between public and cor-

porate family support. If the state and private

companies offer the same services such as child-

care, both parties may (unintentionally) trigger

competition for positive employee reactions. As

a consequence, working parents may perceive

company-sponsored services as less valuable as

more public alternatives are available. For this

reason, the current study examines whether a

high number of public childcare services reduces

the positive reciprocity between working parents

and family-supportive companies with their own

childcare services.

To analyze this research question, we used

data from 414 working parents living in various

cantons of Switzerland. Since Switzerland is one

of the most federalist, multinational states in the

world, cantonal family policies vary among the

26 Swiss cantons (Lijphart, 1999). In addition to

loosely defined nationwide regulations, each can-

ton has its own family support system with vary-

ing numbers of cantonal childcare services. This

naturally occurring, already established variance

among cantons in high and low numbers of pub-

lic childcare facilities allows us to compare the

effects of cantonal child care policies on the orga-

nizational commitment and the intentions to quit

of parents working in companies with their own

childcare services.

The focus of this study is on collective child-

care because this service is provided by the state

as well as by some companies, which makes pub-

lic and company-run childcare services adequate

comparisons. Due to the fact that childcare services

Men and women may desire to have

both a career and a family—not

simply sacrifice one for the other,

which raises the issue of reconciling

work and family life. To achieve rec-

onciliation, working parents often need child-

care services to help balance work and family

matters. The main providers of such services

are the state and private suppliers (Beauregard

& Henry, 2009). At first glance, it might be

assumed that the overall societal benefit would

be greatest if all providers offered as much sup-

port as possible. This assumption may be true

for employees with care responsibilities because

a high variety of suppliers would allow them to

select the best possible option. But how does

widespread public family support affect employ-

ers who voluntarily invest in family-friendly

services themselves?

A driving force behind an

employer who wants to invest

in family-friendly services is

the business need of attracting

and retaining talent in order to

increase company productiv-

ity (Bloom, Kretschmer, & van

Reenen, 2011). Therefore, compa-

nies offer family-friendly services

such as childcare services, antici-

pating positive employee reac-

tions (e.g., higher organizational

commitment). In other words,

companies count on the norm of

positive reciprocity, or the desire for

someone (e.g., the employee), to be

kind in response to the kind acts of

someone else (e.g., the employer)

(Gouldner, 1960). Although pro-

viding family-friendly services does not always

foster organizational commitment (Kelly et al.,

2008), a recently published meta-analysis sup-

ports the view that corporate investment in a

family-supportive work environment evokes a

win-win situation for both sides (Butts, Casper, &

Yang, 2013). Whereas family-supportive compa-

nies help working parents to reduce their work-

family conflict and enhance their work-family

balance (Eby, Casper, Lockwood, Bordeaux, &

Brinley, 2005), the companies themselves benefit

from positive work attitudes and behavior inten-

tions such as higher organizational commitment

(Thompson, Jahn, Kopelman, & Prottas, 2004),

greater loyalty (Grover & Crooker, 1995), and

lower turnover intentions (Allen, 2001).

Alternatively, the welfare state has the primary

goal of increasing and stabilizing the social,

material, and cultural well-being of its citizens