Another empirical support for more government intervention in business affairs comes from the trends and fluctuations in fertility rates, which are directly related to household incomes and opportunity costs of children. This is a significant fact given the declining fertility rates in the United Kingdom and their economic implications.
“A woman’s decision to participate in the labour force is positively related to the market wage relative to her reservation wage, which in turn is an increasing function of her husband’s income. Aggregating over a population of households, the female labour force participation rate is therefore positively related to women’s wages and negatively associated with male incomes. For couples with women in the workforce, fertility is inversely related to the woman’s wage.” (McNown, Robert, and Cristobal Ridao-Cano, p.522)
The following are some of the trends in free market setups:
1.The bigger the corporation, the more likely the employees are to be offered pension and sick pay benefits. This is because they can better exploit the economies of scale inherent in scheme provision.( Casey, Bernard., p.233)
2.The workforces in freer pockets of the UK economy are more unionized and are more likely to receive additional benefits. This is so because the unions hold some amount of power in negotiating complex schemes with their employers. Sometimes, the top management give-in to such demands from the unions as a strategy to divert them from addressing more important issues. (Farnham, David, and Lesley Giles., p.15)
3.Free market approach to employee relations results in employers not offering occupational pensions to the non-professional class of workers as that would reduce their turnover and protect investments in training. (Casey, Bernard., p.234)
4.Part-time, young or female employees are less likely to be offered occupational pensions or extra-statutory sick pay as they are seen as less attached to work and as less likely to be interested in deferred benefits. Obviously, the free market approach to employee management is a case of discrimination based on gender and government regulations in these areas are needed for. (Casey, Bernard., p.239)
5.The only positive trend in the free economies in the United Kingdom is the growing coverage of employer-supported social security benefits. However, the coverage for white-collar workers tends to be better than those for blue-collar workers. It is difficult to see how the status quo would be set straight without government intervention. (Farnham, David, and Lesley Giles., p.17)
6.To enjoy full benefits of occupational pension schemes, the worker has to achieve long years of service while the others suffer significant disadvantage. For this reason, employer-provided social security benefits cannot be relied upon as a substitute for adequate state support. (Farnham, David, and Lesley Giles., p.18)