How Paid Parental Leave Strengthens the Economy
Via Economist's View, this is from an interesting interview with economist Christopher Ruhm, who has done extensive research on work-life issues, including parental leave:
... I found ... that in the presence of parental leave requirements, women were more likely to be employed. There are a lot of reasons why you would expect that to be true. The most obvious one is the notion of job protection. If you don't have to quit your job to take leave, careers outside of the home become more attractive to women.
It's not entirely obvious, however, that it had to work that way. You can imagine the opposite outcome. Employers might have been encouraged to discriminate against women because women are more likely to actually take the leave, for instance. But there was pretty strong evidence that you did find increased employment-to-population ratios for mothers — a larger percentage of mothers became employed. Yet, I also found that if the leaves got sufficiently long, there was some possible negative effect on wages. In some European countries, you're talking about leave lengths that can equal a few years.
....
I used the same dataset and I looked at health outcomes for children, mainly infant mortality rates — deaths in the first year. I also looked at neonatal fatalities, which is death of the baby in the first 30 days, versus post-neonatal fatalities, which is death in the rest of the first year. Then I extended the analysis out to age 5.
The results were quite striking and consistent with what I would have expected. In the first 30 days, you didn't see much of a reduction in infant mortality, most likely because neonatal deaths are unrelated to how much leave the parents are taking after the birth. It has more to do with what type of hospital care you're getting or whether the baby is born with a congenital defect of some kind. But in the post-neonatal period and after that, you see reductions in infant mortality correlated with parental leave mandates.
Hmmmmm, "strengthens the economy." That's very questionable.
I remember reading an opinion by Robert Reich (echoed by Michelle Obama in a completely separate piece), who described a transition in America that began in the 1960's or early '70's. Before that timeperiod, it was fully possible for families at most earnings levels to thrive on one income. But as the transition began to take place, more working hours were needed to maintain the same standard of living. And once the hours limit was reached, women were inducted into the workforce to fill the family income deficit. Soon women were working to full capacity. At this point, for many families, even that isn't enough.
This leaves me questioning, what is so innately different today that the work/life ratio of 35-years-ago can't be replicated? The short answer is: nothing. Even the argument of "increased technology costs more" fails, because we can easily prove that technology and its associated costs increased dramatically from, say, 1890 to 1965. Yet it didn't cause people's working hours to increase--in fact, they probably decreased! So whereas there is nothing innately necessary about the current condition, there are indeed fundamental flaws in America's system today--inequitable distribution of taxation, governmental overspending and over-regulating, etc. are all at the source of the problem.
But instead of tackling the illness, it is more common to treat the symptoms and then accept outcomes such as "women were more likely to be employed," without questioning whether that should even be a requisite component of a family's income structure in the first place. An optional component perhaps, but a required one??
And by the way, those european countries (mainly the Nordics), which have the most 'generous' mandated policies in place, also have the most highly centralized economies--lots of big corporations and institutions (which can absorb the costs of those policies), but few small and medium sized businesses (which can't absorb the costs). Not surprisingly, they have among the lowest standards of living in Europe--they look high 'on paper' perhaps, but try living there (as I often do) and you'll see the shortcomings.
You think most Americans would accept living in a two-bedroom flat while raising two children through adulthood?! That's the macroeconomic effect of such 'generous' policies in the Nordics. You really have to weigh it. IMO, other parts of Europe are much better overall, despite not having all those special programs.
Of course, to nullify some of the top-heavy effect, you can absolve businesses up to a certain size of the requirement of offering parental leave. But, once again, you haven't solved the core problem. Instead, you've simply exacerbated the condition by creating yet another imbalance which isn't really helpful--this time according to employment sector. There shouldn't be the need to limit ones choices to only large companies which offer these 'special benefits,' especially since small companies should be more plentiful and would perhaps be closer to home, geographically speaking.
Whereas I do think it's important for women to be able to care for their families without it causing a strain on family finances, I think that the economy needs to be structured so that they can choose to work part-time and with built-in flexibility as a rule at nearly all family income levels. That would be the best cure possible.