What Are the Job Impacts of Family Leave?

 

Ivankanomics proceeds. From Politico: “Trump officials start Hill talks on maternity leave, child-care proposals.” But of course. Other advanced, high-income economies offer, for instance, generous paid leave. Is America not an advanced economy? Is America not a high-income country? Forward!

Yet a review of the economic literature presents a more nuanced view of the benefits of family leave. This from “The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries” by Claudia Olivetti and Barbara Petrongolo is worth pondering when considering next steps:

What can we learn from the evolution of family policies across high-income economies? It is a complex tale in which changing economic, cultural and political economy considerations appear to shape (and be shaped) by these policies. No obvious consensus on the labor market impact of parental leave rights and benefits emerges from the empirical literature.

Although there are some exceptions, it seems fair to summarize that cross-country studies tend to find more positive effects on female employment than micro-level studies for relatively short leave durations, and more negative effects for longer entitlements. Employment and earnings impacts tend to be positive for the less-skilled, possibly with a negative effect on the earnings of high-skill women. In a nutshell, the evidence that extended parental leave rights have an overall positive effect on female outcomes is mixed. The policies with the strongest evidence for reducing gender disparities seem to be childhood education (in both cross-country and micro data) and in-work benefits (in the micro data).

Published in Economics
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  1. Randy Weivoda Moderator
    Randy Weivoda
    @RandyWeivoda

    It’s quite likely that what works in one company doesn’t work in another, which is why the federal government should keep it’s nose out and let the businesses decide on their own policies.  If employees don’t like it, the companies that keep losing employees will try to figure out why their former employees prefer to work elsewhere.

    • #1
  2. CM Inactive
    CM
    @CM

    That is not enough nuance. A very big, stark, intrusive element into this debate needs to be future economies and long-term thinking; not just short-term and immediate benefits.

    Women and men working has had an effect on our economy. Not only have we created higher earning families with dual income families, but our standard of living has increased. Middle class, average families can afford large homes, multiple cars, possibly even a maid to clean that house occasionally.  But not only are these “nice to haves”, they are also necessary with two people working. Both need transportation to work. Someone needs to clean the house. Adding in children just complicates this further. Child care, private education… the costs are piling on and it isn’t cheap. Introducing the DINKs – Dual Income, No Kids.

    You can see this in our birth rates… in fact, in all the birth rates of advanced economies. Sure, we don’t need as many kids to reach replacement, but we DO need more than 1 and DEFINITELY more than 0. But we all know the consequences of below-replacement birth rates, right?

    If you want to let women into the work place and still keep birth rates at acceptable levels, then there needs to be alleviation of the financial burdens of creating families in a high-standard of living (read EXPENSIVE) economy. Maternity leave benefits are one of those boons to kick start that birth rate.

    • #2
  3. Joe P Member
    Joe P
    @JoeP

    CM (View Comment):
     

    If you want to let women into the work place and still keep birth rates at acceptable levels, then there needs to be alleviation of the financial burdens of creating families in a high-standard of living (read EXPENSIVE) economy. Maternity leave benefits are one of those boons to kick start that birth rate.

    Umm, I haven’t checked recently, but I think the birth rate has been declining in all of these countries that have generous maternity leave benefits mandated by the government. So, how is maternity leave a boon to kick start the birth rate?

    • #3
  4. CM Inactive
    CM
    @CM

    Joe P (View Comment):

    CM (View Comment):

    If you want to let women into the work place and still keep birth rates at acceptable levels, then there needs to be alleviation of the financial burdens of creating families in a high-standard of living (read EXPENSIVE) economy. Maternity leave benefits are one of those boons to kick start that birth rate.

    Umm, I haven’t checked recently, but I think the birth rate has been declining in all of these countries that have generous maternity leave benefits mandated by the government. So, how is maternity leave a boon to kick start the birth rate?

    France and Sweden have both increased maternity benefits and are seeing a rise. It is a low rise, but it IS in an upward trend. Ireland beats everyone at 1.94, where Ireland puts a big emphasis on family policy (but have low female participation in the workforce).

    So, no, birth rates are not declining with improved family policy. These policies are still generally new, so the impact is yet to truly be felt and will be muddied by immigration from countries with high birth rates.

    Discussion of family policies need to be discussed in broader terms than just immediate pay off (which Pethokous’ “nuanced” viewpoint limited itself to).

    If Female labor participation boosts economy in the short term and we want to encourage it, then family policy needs to be part of the long term economic policy.

    • #4
  5. Joe P Member
    Joe P
    @JoeP

    Yeah, I’m still skeptical.

    France I think is having an increase in the birth rate because the children of Muslim immigrants to France are now starting to have children themselves. I doubt it’s because of “family policy,” but because these people prefer their women at home instead of in the workforce for religious reasons. Same with Ireland, which people joke is basically the Catholic version of a Sharia in practice would look like.

    I’m not familiar enough with Sweden to know what’s going on there, but it and France are not the only countries in Europe trying out various policies to increase birth rates, so I’m thinking that “family policy” is going to work just as well for them as “industrial policy,” e.g. it’ll be really expensive, fail at everything it attempts to do, and then be really hard to claw back because it creates interest group that wants it around.

    • #5
  6. Randy Weivoda Moderator
    Randy Weivoda
    @RandyWeivoda

    Joe P (View Comment):
    Yeah, I’m still skeptical.

    France I think is having an increase in the birth rate because the children of Muslim immigrants to France are now starting to have children themselves. I doubt it’s because of “family policy,” but because these people prefer their women at home instead of in the workforce for religious reasons. Same with Ireland, which people joke is basically the Catholic version of a Sharia in practice would look like.

    I’m not familiar enough with Sweden to know what’s going on there, but it and France are not the only countries in Europe trying out various policies to increase birth rates, so I’m thinking that “family policy” is going to work just as well for them as “industrial policy,” e.g. it’ll be really expensive, fail at everything it attempts to do, and then be really hard to claw back because it creates interest group that wants it around.

    I haven’t read any articles recently, but several years ago Russia was trying to get families to have more children and it wasn’t working.

    • #6
  7. Joe P Member
    Joe P
    @JoeP

    Randy Weivoda (View Comment):
    I haven’t read any articles recently, but several years ago Russia was trying to get families to have more children and it wasn’t working.

    That one I remember as being a disaster that wasn’t working. They were trying to pay mothers cash to get pregnant, because Russia had a population that was in decline in addition to a declining birth rate. I haven’t heard about it in a few years though.

    • #7
  8. CM Inactive
    CM
    @CM

    Joe P (View Comment):
    I’m not familiar enough with Sweden to know what’s going on there, but it and France are not the only countries in Europe trying out various policies to increase birth rates, so I’m thinking that “family policy” is going to work just as well for them as “industrial policy,” e.g. it’ll be really expensive, fail at everything it attempts to do, and then be really hard to claw back because it creates interest group that wants it around.

    Well, the freedom loving conservatives around here better start taking these issues seriously, because at the rate we are going, when our economy bottoms out due to low birth rates (immigrant birth rates regress to the norm of the country they reside in within a generation), you will see a push for women to leave the workforce out of necessity. If the only cause for low birth rates is female labor participation, then expect countries to start doing away with it when immigration proves unhelpful to fill the gaps.

    You should hope other policies will work if you truly think women should be participants in the economy outside of reproduction.

    • #8
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