APPENDIX 4
Memorandum submitted by Professor Peter
Moss[4]
(PL 2)
SUMMARY
The introduction of a statutory entitlement
to parental leave, including decisions about payment, requires
a number of questions to be addressed, including: what are our
objectives for parental leave? what are our priorities among these
objectives? How will we judge if parental leave is working? how
will we be able to make the judgement whether parental leave is
working? How should a complex and cross-cutting measure like parental
leave be implemented, administered, reviewed and revised? So far
these questions have not been adequately addressed.
Only six EU member states make (or propose to
make) no form of payment to parents taking their parental leave
entitlement: Greece, Ireland, Netherlands, Portugal, Spain and
(when implemented) Britain. There are great variations in the
payments made by the remaining member states. However, they can
be divided into two groups : three have an earnings-related element
in their payment, the rest have various forms of flat-rate payment.
The experience of other countries—and the conclusion of
successive reviews of the subject—suggests there is a strong
case for parental leave being paid, if it is to be widely used
and provide parents with a genuine choice.
Parental leave is widely used by mothers, at
least where it is paid. Take-up by fathers is generally marginal,
with the exception of Sweden, where about half of fathers take
leave. The experience of Sweden suggests that payment is a necessary
but not sufficient condition for high take-up by fathers. Similarly,
payment alone may not be the only condition for take-up by mothers.
In the EU, state payments to men and women taking
parental leave are universal—except in France and Germany,
and even in these two countries most families get some payment.
Where statutory schemes are paid they are always publicly-funded,
although employers sometimes provide additional payments as part
of collective agreements or company policies.
The conclusions of the memorandum are that:
— to be effective in terms of take-up,
especially for men as well as women, parental leave needs to be
paid, although payment is not a sufficient condition for high
take-up;
— payment should come from public funds,
and should be earnings-related, with the possibility (at least
initially) of setting an upper limit on the amount paid to any
one parent;
— attention should be given to developing
a more integrated and consistent relationship between maternity
and parental leave, possibly based on a rather shorter period
of post-natal maternity leave (except in special circumstances),
a rather longer period of parental leave (for women and men) and
a consistent, earnings-related approach to benefit payments across
both leave periods;
— payment to parents on (maternity
and parental) leave should be viewed as part of the total package
of State income support to families with children, rather than
as a separate employment-related benefit, and decisions about
methods of payment should be made in that context;
— decisions on payment (as well as
on other features of leave such as flexibility) should be explicitly
related to clear and stated objectives for parental leave and
regularly reviewed in the context of monitoring and research into
the impact of parental leave.
INTRODUCTION: PLACING
PAYMENT IN
CONTEXT
1. Although the focus of this enquiry is
payment for parental leave, I would like to make a couple of introductory
remarks before addressing this subject. First, parental leave
has been advocated for and linked to various objectives, including:
promoting gender equality (eg retaining women in the labour market
and encouraging men to take more childcare responsibilities);
enhancing employment rights for women and men; enhancing children's
welfare and rights (eg giving children the right to more time
with their parents); giving rights to fathers and recognising
the importance of fatherhood; strengthening family policy (eg
by supporting parenting and family relationships); supporting
particular ideologies of parenthood (eg that children should receive
parental care up to a certain age); reducing public expenditure
on childcare services by reducing demand for these services; reducing
unemployment through the replacement of workers on leave by unemployed
people; and so on. These objectives are not necessarily complementary,
some indeed may be contradictory (eg some parental leave measures
aimed at reducing unemployment and/or encouraging parental care
for children under 3 may have the effect of increasing gender
inequality in the labour market); while different objectives may
have implications for the form parental leave takes, including
whether and how payment is made. Up to now, however, insufficient
attention has been paid in the UK to the reasons for introducing
parental leave, over and above meeting a requirement arising from
adoption of the Social Chapter Similarly, more attention needs
to be given to defining targets in relation to these objectives
and priorities (eg setting a target for take up by men if there
is an objective of promoting more equal sharing of family responsibilities),
against which the workings of parental leave can be evaluated.
2. Parental leave needs to be carefully
monitored and researched, both in the workplace and the family,
to see if it is working and the factors which may affect its operation.
The results of this monitoring and research need to inform a regular
system of review, which should consider whether changes are called
for in the design and operation of parental leave, with the question
of payment being considered alongside and in relation to other
features such as flexibility. Monitoring and research of parental
leave has been generally inadequate in most of the EU, making
it difficult to evaluate how parental leave has worked in practice.
At this stage, it is not apparent that any measures are in hand
in the UK to ensure adequate evaluation of parental leave through
monitoring and research, nor to institute a regular system of
review.
3. Without these issues being addressed
not only is it difficult to make informed decisions about issues
such as payment, but there is a real danger of parental leave
becoming in the UK (as in some other European countries) a meaningless
entitlement and an empty gesture.
4. Finally by way of introduction, parental
leave presents a challenge to the idea of "joined up government",
involving as it does a wide range of potential objectives, policy
areas and interests (eg children, mothers, fathers, employers
etc). To be effective parental leave also needs to be seen in
relation to other policy measures concerned with working parents,
children's rights and income support for families (eg other leave
entitlements, services providing care for children, benefits to
parents). Attention needs to be given to how these cross-departmental
objectives and constituencies can best be recognised and addressed
in the future governance of this measure. Although the DTI has
been given lead responsibility for introducing the measure, it
is not at all clear that this is the most appropriate government
department to assume lead responsibility for implementation, monitoring
and review of parental leave.
5. In sum, the prospect of parental leave
being introduced in the UK raises several basic questions:
— What are our objectives for parental
leave?
— What are our priorities among these
objectives?
— How will we judge if parental leave
is working?
— How will we be able to make the judgement
whether parental leave is working?
— How should a complex and cross-cutting
measure like parental leave be implemented, administered, reviewed
and revised?
Issues concerning payment of parental leave
need to be considered in relation to the answers to these questions,
and not in isolation.
PAYMENT OF
PARENTAL LEAVE
IN OTHER
COUNTRIES
6. The experience of other countries suggests
there is a strong case for parental leave being paid, if it is
to be widely used and provide parents with a genuine choice. This
has been the conclusion of successive reviews of the subject:
The Committee believe that workers on parental
leave should be paid. The method of payment should be left to
each member state. The Committee believe that the draft directive
(from the European Commission on Parental Leave) is right to propose
that payment be made from public funds.
(Report on "Parental Leave and Leave for Family
Reasons" issued by the House of Lords Select Committee on
the European Communities, 1985: para 113)
If leave arrangements are to be used by a significant
number of men and make a real contribution to more equal sharing
of family responsibilities. . . (then) parents taking leave must
be compensated for all or nearly all of their lost earnings; otherwise,
no parents can afford to take leave or, if one income can be foregone,
there will be a strong economic case for making this the lower
income which. . . will usually be the mother.
("Leave Arrangements for Workers with Children",
EC Childcare Network, 1994: page 39).
It is generally assumed that take-up rates are
closely correlated with the level of benefits: the higher the
earnings replacement rate, the higher the take-up rate. This seems
to be confirmed by most of the evidence presented.
("Long-Term Leave for Parents in OECD Countries"
in Employment Outlook 1995, OECD 1995: Page 187).
Successful schemes need to offer a significant
level of wage replacement together with job protection if they
are to benefit low paid workers as well as higher paid employees
and to involve men as well as women.
("Time Out: The Costs and benefits of Paid Parental
Leave", Demos report by Helen Wilkinson and others, 1997:
page 83).
7. Only a minority of EU member states—six—make
(or propose to make) no form of payment to parents taking their
parental leave entitlement: Greece, Ireland, Netherlands, Portugal,
Spain and (when implemented) Britain. Those countries that do
pay can be divided into two groups (see the Appendix to this memorandum
for details of leave arrangements in all member states + Norway).
Three—Finland, Sweden and Italy—have an earnings-related
element in their payment. But this varies: Sweden offers 80 per
cent of earnings for 12 months (up to a maximum level), followed
by a low flat-rate payment for the final three months; Finland
has a lower earnings-related payment (the proportion of earnings
varying according to income but averaging about 66 per cent) for
half of the first year, followed by more than two years of a flat
rate payment (just to complicate matters, the different payments
relate to two different types of leave, an earnings-related payment
for Parental Leave and a flat-rate payment for what is termed
Child Care Leave); while payment in Italy is at the rate of 30
per cent of earnings during the six months of parental leave.
8. In the remaining six countries which
pay, benefit is offered at a flat rate. But that is about as far
as any generalisation will go: again, once down to the details,
everything varies. Levels of payment differ considerably (for
example, 1,614 kroner per week in Denmark compared to 600 deutschmark
per month in Germany). France and Germany do not pay all parents:
the former limits payments to families with two or more children,
the latter operates a means-test. Austria provides a supplement
to lone parent or low income families. Denmark and Belgium have
two levels because they have two types of leave.
TAKE-UP
AND PAYMENT
9. Parental leave is widely used by mothers,
at least where it is paid. (Where it is not paid one consequence
is usually that there is no information on actual take-up since
no records are kept; anecdotal and other evidence however points
to low take-up in non-paying countries. It is also suggestive
that evidence of maternity leave take-up in the UK suggests most
mothers resuming work do so well before the end of the 29 week
post-natal leave period, one reason being that the later part
of this period of leave is not paid). Take-up by fathers is generally
marginal, with the exception of Sweden, where about half of fathers
take leave, averaging about two months (in addition nearly all
fathers take paternity leave and fathers account for about a third
of the days of leave taken by parents to care for sick children;
both types of leave are paid at a high earnings-related rate).
10. High earnings-related benefit payments
to parents taking leave (up to a maximum level of payment) seems
to be a necessary but not sufficient condition for achieving this
level of take-up in Sweden. The relatively high take-up rate among
fathers, achieving which has been a fairly gradual process, cannot
be separated from a sustained emphasis in Swedish society, including
at a political level, on the importance of gender equality in
care as well as employment, and a range of measures to promote
greater involvement by men in the care of their children. (As
a striking example of how fatherhood is on the political agenda,
interviews conducted with party leaders before the 1998 elections
in Sweden revealed that four of the six male party leaders had
taken parental leave to be with their children, and that all of
them thought the government should do more to encourage men to
take leave, either through information or through changes to parental
leave rules that would advantage couples where both parents shared
leave).
11. Norway provides further evidence that
high benefit levels are an important but not sufficient condition
of leave taking, especially by fathers. Norway, like Sweden, offers
a high rate of earnings-related payment to parents taking leave
(between 80 per cent and 100 per cent of earnings, up to a maximum
level). By itself, however, such generous payments had made little
impact on take-up by Norwegian fathers. What changed the situation
in Norway was an amendment to leave arrangements which specified
that one month of leave could only be taken by fathers (the "use
it or lose it" principle). Virtually overnight, about three-quarters
of fathers began to take leave for this month. By contrast, take-up
rates for fathers taking leave in Sweden have grown steadily over
the years, and showed no large increase when a similar "fathers"
month was introduced recently.
12. Further evidence of the impact of payment
is provided by Germany which has a relatively low and means-tested
benefit payment. There is a high level of Parental Leave take-up—at
least among women (fathers' use is very low illustrating the importance
of high benefit payments if men are to take leave). However, this
high take-up level among mothers is probably also related to low
levels of publicly-funded services for very young children and
a strong and widespread ideology that children should be cared
for by their mothers, at least until the age of 3. The 1995 OECD
report commented that
In Austria and Germany, take-up rates are high
in spite of limited benefits. This suggests a more complicated
interpretation (than a simple correlation between benefits and
take-up). In both there is little alternative to parents as carers
for young children. . .These examples show the importance of analysing
parental leave in the context of the entire set of rules and institutions
in which it fits rather than as an isolated phenomenon (187).
13. There is also some tentative evidence
of the responsiveness of leave taking to variations in benefit
payments. A 10 per cent cut in benefit in Denmark was associated
with a 27 per cent drop in numbers taking leave between 1995 and
1996; while the introduction of a new payment in France in 1994
for parents with a second child was associated with a reduction
of economic activity amongst mothers with two children from 69
per cent in 1994 to 53 per cent in 1998. However I emphasise "associated",
using this word rather than "caused": for while interesting
and suggestive, it should be emphasised that such evidence is
far from conclusive.
FUNDING PAYMENT
14. In the EU, state payments to men and
women taking parental leave are universal—except as noted
above in France and Germany, and even in these two countries most
families get some payment. Where statutory schemes are paid they
are always publicly-funded, and come from "mainstream"
public sources.
Parental leave benefits are financed through
a range of programmes. In most cases, they are part of a broader
set of benefits paid out of a common fund, most frequently health
and unemployment insurance funds, less often family funds.
("Long-Term Leave for Parents in OECD Countries"
in Employment Outlook 1995, OECD 1995: Page 187).
15. To take an example, the most generous
and best developed system of parental leave in the EU is in Sweden.
In 1997 parental leave and other forms of paid leave (eg paternity
leave, leave to care for sick children) cost 13.3 billion kroner
(about £1 billion). These leave payments constituted 43 per
cent of all state benefit payments to families (other benefit
payments include child benefit, housing allowances, support for
single parents and allowances for parents of children with disabilities),
illustrating the very central role of paid parental leave in family
support in a society where the great majority of parents are employed.
These leave payments are financed through employer payroll taxes,
but are paid out through local social insurance offices.
16. Employers, therefore, are not expected
to pay employees taking statutory leave, although they contribute
indirectly through the taxes they pay. The main qualification
to this general statement is that payments additional to the basic
entitlement may be paid direct by employers where such additions
form part of collective agreements or individual employer benefit
schemes. For example, employees in the public sector in Denmark
taking leave receive their full earnings due to a collective agreement,
employers making up the difference between the benefit payment
and full earnings.
MATERNITY LEAVE
AND PARENTAL
LEAVE
17. Within an EU context, the UK is unique
in the length of its full maternity leave—and the fact that
most of the maternity leave period is unpaid; elsewhere, maternity
leave is shorter but fully paid, usually at a high earnings-related
level (the UK is also unique in having two types of maternity
leave pay, part earnings related, part flat rate). Under current
circumstances, if the UK introduced paid parental leave, we would
have the strange situation that some women would take maternity
leave consisting of two rates of payment followed by no payment,
then move to a period of paid parental leave.
CONCLUSION
18. To be effective in terms of take-up,
especially for men as well as women, parental leave needs to be
paid (although payment is not the only condition for, or a guarantee
of, take-up). Payment should come from public funds, and should
be earnings-related, with the possibility (at least initially)
of setting an upper limit on the amount paid to any one parent
(ie as in Norway and Sweden); this upper limit would have the
effect of ensuring that lower income parents received a higher
proportion of their earnings than high income parents.
19. Attention should be given to developing
a more integrated and consistent relationship between maternity
and parental leave, possibly based on a rather shorter period
of post-natal maternity leave (except in special circumstances),
a rather longer period of parental leave (for women and men) and
a consistent, earnings-related approach to benefit payments across
both leave periods.
20. Payment to parents on (maternity and
parental) leave should be viewed as part of the total package
of State income support to families with children, rather than
as a separate employment-related benefit, and decisions about
methods of payment should be made in that context. Finally, decisions
on payment (as well as on other features of leave such as flexibility)
should be explicitly related to clear and stated objectives for
parental leave and regularly reviewed in the context of monitoring
and research into the impact of parental leave.
May 1999
4 Peter Moss is Professor of Early Childhood Provision
at Thomas Coram Research Unit, Institute of Education University
of London. In 1984 he was Advisor to the House of Lords Select
Committee on the European Communities for their consideration
of the EC Draft Directive on Parental Leave and Leave for Family
Reasons. Between 1986 and 1996 he was the Coordinator of the European
Commission Network on Childcare and Other Measures to Reconcile
Employment and Family Responsibilities, an expert group which
several times reviewed leave arrangements in the European Union.
In 1994, the Network published a full review entitled Leave
Arrangements for Workers with Children. In January 1999, he
was co-organiser of a European seminar in Brussels-Parental
Leave in Europe: Research and Policy Issues-which included
reviews of research on parental leave from six member states.
He has also undertaken work on the operation of parental leave
in Sweden. Back
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