Parental leave

Capabilities approach

Amartya Sen and Martha Nussbaum have developed a political model known as the Capabilities approach, where basic freedoms and opportunities are included in economic assessments of a country's well-being, in addition to GDP. Nussbaum proposed 10 central capabilities as the minimum requirement for a decent society. In Nussbaum's model, states should provide the resources and freedoms to ensure people have the opportunity to achieve a minimum threshold of each central capability. Universal, paid parental leave is an example resource states can provide so people have the option of starting a family while also working; for instance, under capacity 10 (control of one's environment), the state has a responsibility to ensure all people have "the right to seek employment on an equal basis with others."

Gender equality

Whether parental leave contributes to gender equality depends upon (a) whether laws consider a child to be the responsibility of both parents and (b) whether the leave is equal as to the sexes. An example of a law that does not consider fathers equally responsible is England's parental responsibility law, which is gender-neutral and equal, but baseline applies only to fathers married to the mother at the time of the birth and thus exempts fathers not married to the mother unless someone brings an action on behalf of the child. An equal leave policy would consider the father to be more responsible than the mother for child care after birth, as the time in the womb is counted solely to the mother; in such a policy, mothers would be expected to consume leave for pregnancy, delivery and early lactation that would be matched by time fathers take later in the child's life.

In a 2014 Swiss study, Lanfranconi & Valarino identified one of the important ways Switzerland has considered parental leave policies is related to gender equality, where parental leave "enabl[es] a more equal division of work between men and women by fostering paternal involvement in childcare." Similarly, a 2015 study by Rønsen & Kitterød found that part of the effect of Norwegian parental leave policy "contributed to... a more equal division of paid and unpaid work among parents."

The advancement of gender equality has also been on the political agenda of Nordic countries for decades. Although, all Nordic countries have extended the total leave period, their politics towards father’s quota are different. Iceland, Norway and Sweden have established equal 3 months quotas for the father. The only Nordic country that does not provide fathers with a quota is Denmark. However, the dual earner/dual care model seems to be the direction of all the Nordic countries are moving in the construction of their parental leave systems.

Income and workforce

Paid parental leave incentivizes labor market attachment for women both before and after birth, affecting GDP and national productivity, as the workforce is larger. Parental leave increases income at the household level, as well, by supporting dual-earner families.

Paid parental leave incentivizes childbirth, which affects the future workforce. It is thus argued that paid parental leave, in contrast to unpaid parental leave, is harmful to children's welfare because in countries with an aging workforce or countries with Sub-replacement fertility, children are born not because the parents want the child and can meet the child's needs but because children are expected to support their parents. Some see children as responsible for supporting all those in older generations in the society (not just the child's specific parents); their earnings are expected not to be saved for the children's own old age, but to be spent on the earlier generations' demand for social security and pensions for which there was inadequate savings.

Statistical discrimination

The neoclassical model of labor markets predicts that if the cost of hiring women of child-bearing years is anticipated to increase (either because the employer is mandated to pay for maternity leave, or because she will be absent from work on public leave), then the "demand" for women in the labor market will decrease. While gender discrimination is illegal, without some kind of remedy, the neoclassical model would predict "statistical discrimination" against hiring women of child-bearing years.

Occupational sex segregation

If women take long parental leaves, the neoclassical model would predict that their lifetime earnings and opportunities for promotion will be less than their male or childfree counterparts, or the "motherhood penalty." Women may seek out employment sectors that are "family-friendly" (i.e., with generous parental leave policies), resulting in occupational sex segregation. Nielsen, Simonsen, and Verner examine what the different outcomes for women in Denmark are between the "family-friendly" and the "non-family-friendly" sector.^[10] In Denmark, the public sector is "family-friendly" because of its generous leave and employee benefits; workers decide which sector to work on based on their preferences and opportunities. The study found that while in the "family-friendly" sector, there was basically no wage loss related to taking parental leave, women did have consistent earnings loss in the "non-family-friendly" private sector for a 1-year leave.^[10]

Cost

Universal, paid parental leave can be privately funded (i.e., corporations are mandated to absorb the cost of paid parental time off as part of employee benefits) or publicly funded (i.e., transferred directly to workers on leave, like unemployment insurance). Concerns about private funding include the statistical discrimination described above as well as the costs to smaller businesses. Datta Gupta, Smith, & Verneer found in 2008 that, while publicly funded parental leave has benefits, it is very expensive to fund and question if it is the most cost-effective use of funds.

Effects of parental leave

Typically, the effects of parental leave are improvements in prenatal and postnatal care, including a decrease in infant mortality. The effects of parental leave on the labor market include an increase in employment, changes in wages, and fluctuations in the rate of employees returning to work. Leave legislation can also impact fertility rates.

Effects on the labor market

A study in Germany found that wages decreased by 18 percent for every year an employee spends on parental leave. However, after the initial decrease in wages, the employee’s salary rebounds faster than the salary of someone not offered parental leave. A study of California’s leave policy, the first state in the U.S. to require employers to offer paid parental leave, showed that wages did increase.

Parental leave can lead to greater job security. Studies differ in how this helps return to work after taking time off. Some studies show that if a parent is gone for more than a year after the birth of a child, it decreases the possibility that he or she will return. Other studies of shorter leave periods show that parents no longer need to quit their jobs in order to care for their children, so employment return increases.

According to a 2016 study, the expansion of government-funded maternity leave in Norway from 18 to 35 months had little effects on parental earnings and labor force participation.

Length of leave

In 2013, Joseph, Pailhé, Recotillet, and Solaz published a natural experiment evaluating a 2004 policy change in France. They were interested in the economic effects of full-time, short paid parental leave. Before the reform, women had a mandatory two-month parental leave, and could take up to three years unpaid parental leave with their job guaranteed, though most women only took the two months. The new policy, complément libre choix d'activité (CLCA), guarantees six months of paid parental leave. The authors found positive effects on employment: compared to women in otherwise similar circumstances before the reform, first-time mothers who took the paid leave after the reform were more likely to be employed after their leave, and less likely to stay out of the labor force. The authors point to similar results of full-time, short paid parental leave observed in Canada in 2008 by Baker and Milligan, and in Germany in 2009 by Kluve and Tamm. However, Joseph, et al., also found that wages were lower (relative to women before the reform) for medium- and highly educated women after the leave, which could be because the women returned to work part-time or because of a "motherhood penalty," where employers discriminate against mothers, taking the six-month leave as a "signal" that the woman will not be as good of an employee because of her mothering responsibilities.

Rasmussen conducted analyzed a similar natural experiment in Denmark with a policy change in 1984 where parental leave increased from 14 to 20 weeks. Rasmussen found the increased length of parental leave had no negative effect on women's wages or employment, and in the short-run (i.e., 12 months) it had a positive effect on women's wages, compared to the shorter leave. There was no difference on children's long-term educational outcomes before and after the policy change.

Paternity leave

While uncommon on a worldwide scale some countries do reserve parts of the paid leave for the father, meaning it can't be transferred to the mother and lapses unless he uses it. Among the earliest countries to actively push for increased usage of paternity leave are the Nordic welfare states - Iceland, Denmark, Sweden, Norway and Finland. These countries lack a unified concept of paternity leave, each imposing different conditions, ratios and timescales, but are regarded as among the most generous in the world, "Norwegian parental leave benefits". Partly in an initiative to combat the "Motherhood penalty," Norway initiated a policy change in the mid-2000s to incentivize paternal leave. The new policy, sometimes called the "daddy quota" in Nordic family policy entitles families to additional leave than they would otherwise be eligible for if the father takes at least 12 weeks of leave, since reduced to 10 weeks as of July 2014. To evaluate this change, Rønsen & Kitterød looked at the rate and timing of women's return to work after giving birth, and the effect on this of the new parental leave policy. In their 2015 study, Rønsen & Kitterød found women in Norway returned to work significantly faster after the policy change. However, public or subsidized daycare was greatly expanded at the same time, so Rønsen & Kitterød did not find that the "daddy quota" was solely responsible for the timing of work entry. But it can be understood to have an effect on division of household labor by gender when both parents can take time to care for a new baby.

Based on research of heterosexual couples, a better father’s immersion in the process of raising a child leads to an enhanced child’s development and furthermore improves the relationship between the two parents. In recent years, various OECD countries drew attention to that topic, especially to the time of the parental leave taken by fathers. Short-term father’s leaves still lead to positive outcomes for the child’s development. However, due to the typically higher income-levels of men mother’s leaves are preferred to father’s leaves since the economic stability of the family is better secured. Fathers tend to use less parental leave than mothers in the United States as well as in other countries where paid leave is available, and this difference may have factors other than the financial constraints which impact both parents. Bygren and Duvander, looking at the use of parental leave by fathers in Sweden, concluded that fathers’ workplace characteristics (including the size of the workplace, whether there were more men or women in the workplace, and whether the workplace was part of the private or public sector) influenced the length of parental leave for fathers, as did the presence of other men who had taken parental leave at an earlier point in time. As of 2016 paternity leave accounts for 25% of paid parental leave in Sweden.

Effects on prenatal and postnatal care

A Harvard report cited research showing paid maternity leave “facilitates breastfeeding and reduces risk of infection.” This research also found that countries with parental leave had lower infant mortality rates. The United States, which does not have a paid parental leave law, ranked 56th in the world in 2014 in terms of infant mortality rates, with 6.17 deaths per every 1,000 children born. The research did not find any infant health benefits in countries with unpaid parental leave.

The same Harvard report also linked paid parental leave and a child’s psychological health. It found that parents with paid parental leave had more intense bonds with their children.

While studies have shown conflicting results, some research has shown a link between paid parental leave and higher fertility rates. The research looked at women 25–34 years old, who are more likely to be affected by leave legislation. Fertility rates peaked for those between 25-29 and 30-34 across European countries.

Effects on mothers

In the U.S., while the Family and Medical Leave Act of 1993 allows for unpaid parental leave, due to economic concerns, parents often do not utilize this eligibility to its fullest extent, and as a result, some studies show that the FMLA has had a limited impact on the leave-taking behavior of new parents. Though specific amounts can vary, having a child (including the cost of high-quality childcare) costs families approximately $11,000 in the first year. These financial issues contribute to new mothers in the United States returning to work quicker than new mothers in European countries; approximately one-third of women in the United States return to work within three months of giving birth, compared to approximately five per cent in the UK, Germany, and Sweden, and just over half of mothers in the United States with a child under the age of one work.

According to a 2016 study, the expansion of government-funded maternity leave in Norway from 18 to 35 months led mothers to spend more time at home without a reduction in family income.

Effects on fathers

Biology and social values have historically not included child care in the main responsibilities of fathers. However, in some, mainly western, countries, politicians and social scientists argue for changing the role of the fathers, and the idea of the ‘new father’ has especially been shaped by the Nordic countries of Scandinavia. The process enables fathers to rationalize their parenting style and align this with what characterizes good care. Even though the mother’s role as main parent has not changed, male parental leave is claimed by its supporters to transform the traditionally gendered father practices and to create a social morality in relation to partners and children. Psychologists however consider that the allegedly positive effects of male parental leave are not supported by research, and warn that it might have negative effects. Norwegian psychology professor Leif Edward Ottesen Kennair believes the father's quota is indefensible from a psychological point of view, and argues that "we must at the very least ask ourselves what the consequences will be when we make a childhood environment that differs from what our species has evolved into." He believes the father's quota is "based on ideology, and only to an extremely limited extent on knowledge," arguing that it is "a social experiment, the effects of which are unknown." It also has to be considered that fathers from different classes see their roles alternatively during their paternity leave. Whereas middle class fathers consider themselves as suitable alternative to the mother having the same competencies, working class men see themselves more as supporters during their leave. In consequence middle class fathers mostly use their leave right after the mother returns to work, meanwhile working class fathers do their leave during the mother's leave.

Effects on children

According to a 2016 study, the expansion of government-funded maternity leave in Norway from 18 to 35 months had little effect on children's schooling. However, when infants bond and have their needs met quickly by caregivers (mothers, fathers, etc) they will become confident and be prepared to have healthy relationships throughout their life.

Effects on economy

According to a 2016 study, the expansion of government-funded maternity leave in Norway from 18 to 35 months had net costs which amounted to 0.25% of GDP, negative redistribution properties and implied a considerable increase in taxes at a cost to economic efficiency. In the U.S., paid family leave tends to lead to a higher employee retention rate and higher incomes for families.

Private parental leave

Some businesses adopt policies that are favorable to workers and public opinion. In their study of maternity leave policies in the United States, Kelly and Dobbin found that public policy surrounding pregnancy as a temporary disability (for instance, California's Family Temporary Disability Insurance program) gave rise to business practices that included maternity leave as a benefit.

Companies are starting to offer paid parental leave as a benefit to some American workers, seeing a profitable aspect of doing so, including: reduced turnover costs, increased productivity from workers, and increased rates of retention among women after childbirth. Some see the increase in paid parental leave as indicative of companies reaching out to women, as more women are working and returning to work after having children, and by doing so these companies generate positive publicity as employers with family-friendly workplaces. Working Mother magazine [3] publishes a list of 100 Best Companies for working mothers each year, a list which is noted not only by the readership of the magazine, but also by corporate America and increasingly by researchers and policy institutes as well. The Institute for Women’s Policy Research[4] issued a report in 2009 encouraging Congress to give federal workers four weeks of paid parental leave. The report cited statistics from the Working Mother 100 Best Company list, using private sector corporations as examples of substantial increase in the retention of new mothers after instituting a longer maternity leave policy. The report also noted that it would take newer workers four years to accrue enough paid leave (sick leave and annual leave) to equal the 12 weeks of unpaid parental leave provided under the FMLA, and that private sector companies which offer paid parental leave have a significant advantage over the federal government in the recruitment and retention of younger workers who may wish to have children.

Variation in international law

The Convention on the Elimination of All Forms of Discrimination against Women introduces "maternity leave with pay or with comparable social benefits without loss of former employment, seniority or social allowances". The Maternity Protection Convention C 183 adopted in 2000 by International Labour Organization requires 14 weeks of maternity leave as minimum condition.

National laws vary widely according to the politics of each jurisdiction. As of 2012, only three countries do not mandate paid time off for new parents: Papua New Guinea, Lesotho, and the United States.

Unless otherwise specified, the information in the tables below is gathered from the most recent International Labour Organization reports. Maternity leave refers to the legal protection given to the mother immediately after she gives birth (but may also include a period before the birth), paternity leave to legal protection given to the father immediately after the mother gives birth, and parental leave to protected time for childcare (usually for either parent) either after the maternity/paternity leave or directly immediately after birth (for example when the parent is not eligible for maternity/paternity leave, and/or where the time is calculated until the child is a specific age - therefore excluding maternity/paternity leave - usually such jurisdictions protect the job until the child reaches a specific age.) Others allow the parental leave to be transferred into part-time work time. Parental leave is generally available to either parent, except where specified. Leave marked "Unpaid" indicates the job is protected for the duration of the leave. Different countries have different rules regarding eligibility for leave, and long a parent has to have worked at their place of employment prior to giving birth before they are eligible for paid leave. In the European Union, the policies vary significantly by country - with regard to length, to payment, and to how parental leave relates to prior maternity leave - but the EU members must abide by the minimum standards of the Pregnant Workers Directive and Parental Leave Directive.

Parental leave policies in the United Nations

As international organizations are not subject to the legislation of any country, they have their own internal legislation on parental leave.