Friday, June 11, 2010

"Daddy leave" and the gender-pay gap

The New York Times has an interesting article about Sweden's paid parental leave system and how it has led to great sexual equality. Sweden is the most progressive country in the world (sorry guys, we yielded that title to them around the time we let Roger Douglas run amok), and has a generous parental leave entitlement of 13 months at 80% pay, plus another three months at a flat rate. The catch? One half of a couple can't take it all - at least two of those months must be taken by the other partner (assuming there is one). This provides fathers with a big financial incentive to take leave, and the result is startling: a massive shift in the burden of parenting, and a similar change in the expectations of employers:

Companies have come to expect employees to take leave irrespective of gender, and not to penalize fathers at promotion time. Women’s paychecks are benefiting and the shift in fathers’ roles is perceived as playing a part in lower divorce rates and increasing joint custody of children.
The shift in employer attitudes has benefited women and helped close the gender pay-gap. It's not just fathers who aren't punished at promotion time - according to a study by the Swedish Institute of Labor Market Policy Evaluation, a mother's future earnings increase by 7% on average for every month of leave the father takes. This policy is good for everyone.

Currently New Zealand offers just 14 weeks of parental leave, at your full weekly pay but capped at below the minimum wage. Pretty obviously, both the duration and the pay rate need to be increased, and this should be a key project for the left. But there's no reason we can't add a non-transferable portion as well to start driving that change in employer expectations. The result will be better for everyone.