Lynn Prince Cooke is a Professor in the Department of Social and Policy Sciences at the University of Bath, and author of Gender revolution, evolution or neverlution? published by the Institute for Fiscal Studies (IFS). Dr Kathrin Morosow is a Lecturer in Social Statistics at the University of Manchester.
The UK gender earnings gap of 40% has not changed much in the past quarter century once controlling for women’s greater educational attainment, according to a new analysis released by the Institute for Fiscal Studies (IFS) as part of their Deaton Review. Gaps in some other European countries like Scandinavia are smaller. A common feature of countries with small gender earnings gaps is generous state-provided, earnings-related paid family leaves, including leaves targeting fathers.
UK father leave entitlements
The UK government offers paid family leaves, but both the length and generosity of its schemes for mothers as well as fathers lag behind most of Europe’s. UK fathers are entitled to only one or two weeks of paternity leave, paid at £151.97 a week, or 90% of the average weekly earnings (whichever is lower). They are also entitled to take any of 37 weeks of the shared parental leave that follows but is also paid at the same low rate. In contrast, Finland offers fathers nine weeks of dedicated father leave paid at 70% of the fathers earnings, while Iceland offers each parent six months of paid parental leave paid at 80% of earnings.
Cost or investment?
A common reason given by the government for not providing more generous, earnings-related leave for fathers is the cost. Central to the UK government’s impact analyses of family leave provisions is that employee absences are costly for employers. This suggests generous family leaves may make businesses less productive. However, the gross domestic product (GDP) per capita is higher in the Scandinavian countries than in the UK, so their generous family leave provisions do not seem to undermine national productivity. In addition, poorly-estimated employer costs of work absences are the only monetised assessment of UK family leaves. Impact assessments list the benefits of parental leave but fail to attach any monetary value to them. Recommendations going forward to Parliament are therefore biased against expanding paid family leaves.
Benefits of fathers’ paid leave
A frequent cited benefit of government support for father caregiving is that it encourages greater gender equality, but less attention is paid to the related financial benefits of this. First, when fathers take parental leave, mothers return to work faster after the birth. Women’s employment continuity not only helps them sustain their skills, but allows the economy to continue to benefit from them. This is especially true as UK women are more likely than men to enrol in university and therefore on average have higher skill levels. Second, mothers’ earnings increase, which both decreases the within-household gender wage gap and increases total household income, which increases the revenue stream from payroll taxes. Third, fathers’ contribution to the family work doesn’t stop at the end of his leave. Fathers who take family leave and especially longer leaves continue to contribute more equally to housework and childcare. This reduces what has historically been women’s domestic responsibilities that can impede their career progress. Men’s greater domestic involvement also improves relationship quality and has even been shown to reduce the risk of divorce. Single parent households are more vulnerable, with 47% of European single-parent households at risk of poverty or social exclusion, as compared with 21% of two-parent households. The risk of poverty for single-parent households is particularly high in the UK as compared with most of Europe. Consequently, enhancing fathers’ paid leave may indirectly reduce the high social and economic costs of UK child poverty.
Increased father involvement also benefits children’s cognitive and socio-emotional development. Longer leaves increase fathers’ engagement in childcare not just during the leave, but also in the long term, and even increase involvement with children after a separation.
Overall, then, fathers’ take-up of paid family leave benefits families emotionally and financially, increases payroll taxes, and may reduce the risks of child poverty.
Does taking leave hurt fathers’ careers?
One widespread perception that discourages fathers from taking family leaves is that doing so will hurt their careers. We recently wrote a paper as part of a European Research Council project to see if this is the case for Finnish fathers. We compared the wage trajectories of fathers opting to take only the shorter three-week earnings-related paternity leave when the mother is also on leave, as well as those of fathers taking additional weeks of father-only leave that can be taken only once the mother has returned to work. No fathers taking the three-week paternity leave suffered any significant wage penalties. Neither did the majority of fathers taking the longer leave that predicts more fundamental changes in couple divisions of housework and childcare. These findings suggest more could be done to assure fathers that being more involved at home does not lead to punishment at work.
This conclusion is supported by the expansion of business support for parental leaves. For example, in 2017, Aviva launched an equal parental leave policy, offering new parents in its UK business 12 months parental leave, with six months at full basic pay. The policy is a big success, with 99% of new dads in 2020 taking parental leave, and 84% taking at least six months. Aviva employees claim this policy allows them to be a much better parent and worker, benefitting the company as much as the family.
If the UK government is serious about reducing the gender wage gap, it should try to monetise the financial benefits of generous paid leaves for fathers in its impact assessments. Expanding UK paid leaves for fathers not only helps to diminish the gender wage gap, it can also improve multiple aspects of the lives of millions of UK families.
- Gender revolution, evolution or neverlution?, IFS, 6 December 2021
- Barely any change to gender earnings gap in last 25 years once you account for increases in women’s education, IFS, 6 December 2021
- Barely any change to gender earnings gap in 25 years accounting for increases in women’s education, University of Bath, 6 December 2021
All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath.