If you live in Iceland and are starting a family, just think 3+3+3. Three months for mom, 3 for dad and 3 however you want to divide it. Dads though get 80 percent of their salary with a nationally set ceiling that has dropped. Their legislature is considering 5+5+2.
Since parental leave has been in the news, let’s take a look.
Parental Leave Plans
Yesterday California’s Governor Brown signed a bill that boosted the state’s parental leave benefit. While workers currently can receive 55 percent of their wage during a six-week absence, in 2018 the entitlement goes up to 70 percent for people earning close to minimum wage. Meanwhile, those who earn up to $108,000 would get 60 percent of what they earn.
Also an increase, the UK just initiated a shared parental leave benefit that can flip back and forth between mom and dad or be used entirely by one of them. The basic premise is that a family gets 50 weeks off. During the first six weeks, the person on leave will get 90 percent of the individual’s average pay and then after, 90 percent of £139.78–whichever is lower–for 33 weeks. The mother has to take the first two weeks but then the couple can decide who gets what and when.
Below fivethirtyeight summarizes OECD (Organization for Economic Cooperation and Development) data. The list though only provides the big picture because there is so much more fine print. Based on the pay-out, the allocation to mom and/or dad, pre-maternity leave, how the capped amount compares to a couple’s income…we could go on and on. The plans and their incentives vary considerably.
Our Bottom Line: Externalities
It probably is impossible to list all of the positive and negative externalities created by parental leave programs. Designed to strengthen the family unit, enhance gender equality, support working women, create nurturing fathers, parental leave can have a positive impact on an entire community. It does though have a cost. True for all public policy, there is a tradeoff in the office and factory, in municipal and national budgets, and, as long as men minimize their participation, for women’s competitiveness in the workplace.