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Can countries stay competitive while providing paid leave?

Today in the Washington Post, FSPH Dean Jody Heymann and Aleta Sprague of the Fielding School's WORLD Policy Analysis Center consider a question worth engaging: Can countries stay competitive while providing paid leave? Evidence on productivity, prosperity, and jobs from highly competitive countries suggests that they can. The evidence also indicates we should not wait for another Mother’s Day to enact paid leave in the United States.

Friday, May 13, 2016

Does paid leave harm U.S. competitiveness?

The Washington Post

By Jody Heymann and Aleta Sprague


Jody Heymann is dean of the Fielding School of Public Health at UCLA and a distinguished professor in the Luskin School of Public Affairs, the David Geffen School of Medicine and the Fielding School of Public Health. Aleta Sprague is a legal analyst at the WORLD Policy Analysis Center at the Fielding School of Public Health.

Throughout the primary season, candidates from both parties have put forth proposals to expand paid parental leave, shifting the question from whether to provide leave to how to do it. Yet paid leave still has some outspoken detractors who express concerns about the economic impacts. Among them is Donald Trump, who has urged that “we have to keep our country very competitive, so you have to be careful of [paid leave].”

It’s a question worth engaging: Can countries stay competitive while providing paid leave?

Evidence from other highly competitive countries suggests that they can. Each year, in its Global Competitiveness Report, the World Economic Forum ranks 140 countries based on their “productivity and prosperity.” Sixteen countries have been consistently in the top 20 for at least eight of the 10 years from 2005 to 2014. Of these, all but the United States provide paid leave for mothers. Most provide at least 26 weeks. Clearly, providing paid leave has not hampered these economies’ success in global markets. For example, in Canada, even as mothers and fathers took on average 32 weeks of paid parental leave from 2008 to 2011, the country’s economy weathered the global recession markedly better than the United States did.

The same holds true for jobs. Within the Organization for Economic Cooperation and Development (OECD), there are 12 countries that have had an unemployment rate below the OECD median for at least eight of the 10 years from 2005 to 2014; notably, the United States is not among them. And as it turns out, all 12 low-unemployment countries guarantee at least 12 weeks of maternal leave. In 10 countries, new moms who take time off can expect to receive at least 70 percent of their regular wages for some or all of the leave, while mothers in Japan receive at least 50 percent and Australia provides a flat rate. Likewise, in two U.S. states that have enacted paid leave — California and Rhode Island — studies have found that the policies have not had the negative impacts on employers that critics predicted.

In fact, some research suggests that failing to provide leave is what’s really hurting our competitiveness. The link between women’s participation in the workforce and economic growth is well-documented: Across OECD countries, eliminating the gender gap in the labor force could increase overall GDP 12 percent by 2030.

Despite legislators’ hesitation, paid leave also finds significant bipartisan support among voters. Recentsurveys show that a majority of both Democrats and Republicans think workers should have paid time off to care for a newborn. Cities and states are increasingly taking the issue into their own hands, fed up with federal inaction. In recent months, both San Francisco and New York City enacted their own policies, newly extending leave to millions of workers.

Yet for the vast majority of Americans, this piecemeal approach won’t be enough — and expectant parents shouldn’t miss out on the significant health and economic benefits of paid leave just because they live on the wrong side of the city limits. A federal policy also makes sense for employers. Right now, companies that operate in different parts of the country — or even different cities within the same state — have to follow different rules for different employees. A federal policy with one set of rules would be simpler to implement for the many businesses that operate across state lines.

It’s well-established that paid maternal leave benefits women, families and economies: It allows mothers time to bond with their newborns; contributes to higher rates of breastfeeding, vaccinations and better postnatal care; and supports women’s earnings and retention in the workforce. Similarly, paid leave for fathers enables men to be more involved at home and has long-term benefits for children. Through a federal parental leave policy, we can ensure that all families have access to these critical supports, as the vast majority of highly competitive and low-unemployment countries have already done. Let’s not wait for another Mother’s Day to enact paid leave in the United States.