So That Mothers Can Work
Gender neutral leave will not bias employers against hiring women.
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Written by Aparajita Dasgupta | Published:September 2, 2016 12:07 am
The new policy is a welcome move to start with. Such measures are even more crucial as we
move away from the extended family system.
A recently announced policy seeks to increase paid maternity leave from the existing 12
weeks to 26 weeks. It is a welcome move towards increasing job security of female
employees but the law may not be sufficient to fulfil its objectives if it ignores the
implications on the broad incentive structure. A policy should not create grounds for
employers to associate employing women workers with higher costs. This may exacerbate the
trend of diminishing female labour force participation in India.
One can argue that without extended maternity leave, young mothers are likely to exit the
labour force in order to take care of their children. The new policy is a welcome move to start
with. Such measures are even more crucial as we move away from the extended family
system. The secured paid leave is also important for child’s health and wellbeing; it allows
the requisite time for early breastfeeding and parental bonding with the child. A number of
studies show that early nurturing by parents goes a long way in improving a child’s cognitive
and non-cognitive outcomes. It is an investment that pays off for the society as a whole.
But policies like maternity leave are often associated with unintended consequences. If the
provision of increased mandatory maternity leave is financed entirely by the employers, it is
likely that they would factor in such costs and that, in turn, may lead them to reduce hiring
young women. It may be more difficult for a woman of reproductive age to find a job in the
formal sector in such a case. Their taking time off may also affect their prospects for
promotion.
We need careful labour market policies that will provide the right incentives that can alleviate
constraints and boost new job opportunities for women. One way of countering this negative
consequence of the new policy is to have gender-neutral leave rules for parents. Paid leave
for early child rearing should not bias the incentive structure against hiring women.
Preventing the penalisation of the woman for the family’s fertility decisions can further the
goal of gender equality. This provision would also allow both parents to be equal partners in
bringing up the child.
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One can think of a shared cost structure between the government and the employees for
financing the paid leave. The cost of guaranteed paid leave can be funded by employees’
payroll deductions or through health insurance programmes, where the cost would be shared
between the employee and the government. This would benefit a number of social objectives.
First, the parental leave mandate would allow both parents to care for the child which can go
a long way in improving human capital outcomes. Second, the dynamics of gender neutral
leave policy, unlike that of exclusive maternity leave, would not discourage employers from
hiring and promoting women. This would also encourage female workforce participation.
Women will also not lose valuable experience and that will enhance their productivity.
Finally, as we know from studies across countries, as labour market opportunities improve
for women, the average fertility level declines in the society. An improvement in
opportunities for women, including safe maternity benefits, could actually improve our
population dynamics.
Empirical evidence from various countries shows that the costs of paid parental benefits, if
borne by public funds or compulsory social nsurance, can provide the right incentives to
avoid the marginalisation of women in the labour market.
The gender neutral parental leave will feed into efficient investments in form of early
childhood benefits that will not only be efficient for the society at large but also ensure
equitable employment opportunity for women.