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How Paid Family Leave Hurts Women

Vanessa Brown Calder

The White House released its full budget last week, and one of
President Donald Trump’s
campaign promises
materialized along with it: paid
family leave
. The details of the program remain hazy, but what
we do know is that states would be required to design and finance
six weeks of paid parental leave for workers. It would cover
mothers and fathers.

This surely sounds like a boon to working women, who (on
average) do more child rearing and housework than working men do. To
those who object to some of the budget cuts to social programs, the
administration’s policy on family leave may even seem
heartwarmingly egalitarian.

Unfortunately, a review of states and countries with
government-mandated paid leave programs indicates they harm young
women, whether they’re available to fathers or not. This is because
parental leave policies are associated with an increase in
leave-taking and childbearing, which leads to lost labor or
increased health care costs for companies. As a result, employers
may assume women will cost more to employ than before the policy,
and company decisions to hire, promote, train or pay women less can
reflect that, at women’s expense.

Deregulating industry
will provide women with more professional choices, and amending
rigid labor laws will endow employers with the flexibility to
provide flexibility.

But it doesn’t have to be this way. Government can create a
buyer’s market for labor through a variety of deregulatory
initiatives. For instance, reforming occupational licensing laws, which prevent
women from working in certain occupations, and relaxing zoning
regulations, which increase low-income women’s commute times, will make it easier for mothers
to participate in the labor force on their terms. Meanwhile,
eliminating the tax exclusion for employer-sponsored health
insurance, which ties women to jobs with abysmal maternity
benefits, will enable women to take jobs that line up better with
their personal needs. Finally, deregulation of inane child care
regulations, such as Washington, D.C.’s new requirement that child care workers obtain
college degrees, will make work economically practical.

Lawmakers should also look closely at an alternative that
Congress is considering: the Working Families Flexibility Act of 2017. The
bill allows interested employees of either gender to bank overtime
hours and use them as time off later as government employees and
some unionized workers already do. Remarkably, private companies
are prevented from compensating employees this way under the
Fair Labor Standards Act. Because women highly
value flexibility at work, the ability to reach this type of
working agreement is more essential than ever.

Ignoring these ideas may be costly, and California provides a
ready example of why government-mandated paid leave is a less
effective way of imparting leave benefits. The state instituted a
six-week paid leave program in 2000, and research indicates a noticeable increase in
young women’s unemployment and unemployment duration lengthened by
4% to 9%. Hypothetically, this is because “firms decrease their
demand for these possibly more costly (female) workers,” according to the report. These results held
when researchers compared young women with Californian men, with
older Californian women and with young women in states that did not
adopt the policy.

Still, defenders of policies such as California’s argue it
hasn’t been around long enough to see a full range of social
benefits. In that case, Europe serves as a shining example of how
government-mandated paid leave can be a letdown, even in the long
term. In the Nordic countries, which are often cited as the gold
standard for gender equity, research suggests family-friendly policies are
a “costly solution” and may have inadvertently created a
“system-based glass ceiling” for women.

And indeed, paid leave policies in Norway seem to have done just
that: Women in the United States occupy, according to a project of
the Cato Institute, about 40% more of the nation’s legislative, senior
official and managerial roles than Norwegian women do in their home
country.

So why is it that paid leave policies, which are ostensibly
created to help women, end up hurting them? For one thing, even in
places where paid leave programs are gender-neutral, female
employees utilize the benefits at higher rates than men do. In
Sweden, for instance, only about 14% of men share the days equally
with their partners despite government subsidies providing bonuses
and tax credits to motivate parents’ identical pision of paid
leave. Woman probably take more leave for a variety of biological,
sociological and cultural factors.

Fortunately, the current proposal and its associated impacts are
not foregone conclusions: The administration’s leave policy still
needs congressional approval. Congress can choose another way:
Deregulating industry will provide women with more professional
choices, and amending rigid labor laws will endow employers with
the flexibility to provide flexibility.

Vanessa Brown
Calder
is a policy analyst at the Cato Institute, where she
focuses on social welfare, housing, and urban policy.