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Parental leave policies leave parents wanting more

Paid leave for new parents hasn’t changed much in 30 years – but parents’ needs have.

Before bonding with your newborn, newly adopted or foster child, there is math to behold. The overall cost of raising children in the U.S. aside (~$17,000 each year per child), some of the first financial conversations soon-to-be parents have will include childcare needs from those first precious weeks through formal schooling.

And what a sobering conversation that can be. Although the Federal Employee Paid Leave Act granted federal employees 12 weeks of paid parental leave, those employed by small businesses, self-employed or part of nontraditional work arrangements don’t qualify.

This means they must rely on either their state or company’s policy, or the Family and Medical Leave Act (FMLA) – where companies with 50 employees or more are required to provide up to 12 weeks of job-protected, unpaid time off – for any chance at a patchwork plan, and that only covers 56% of U.S. workers.

However, many can’t afford to take unpaid leave, and only nine states and the District of Columbia offer paid family leave programs. What’s more, only 19% have defined benefits through their employer … a number that shrinks further among low-wage and hourly workers.

Among companies that do provide paid parental leave, leading the way are technology, financial services, insurance and professional services industries, with leisure and hospitality industry lagging far behind. No matter where companies fall on the spectrum, time available is wide – Netflix provides 52 weeks of paid parental leave and Boeing gives three weeks, for example.

A millennial conundrum

Changing public attitudes and the difficulty of balancing work and family in today’s economy contribute to an increasing sense of urgency around what’s next for paid family leave in the U.S.

These days, in the standard American household, it’s likely that all adults work. Without a parent at home, there’s little flexibility for home-based care for a new baby, sick child or elderly relative without putting jobs in jeopardy.

New millennial generation experiencing the lack of paid parental leave and childcare costs are changing their life plans and having fewer kids than they want.

When it comes to parenting and work, millennials differ from previous generations, which may affect future policy decisions around paid family leave.

  • 78% of millennials with a partner have a spouse/partner working full-time compared to 47% of boomers.
  • 88% of workers would take benefits over a pay raise, with millennials the largest group in support of that view.
  • Close to 60% of millennials are willing to stop working to care for children at home, 12% more than Generation X.
  • More millennials reported they would recommend their employer, be more engaged and happier in their jobs, and be less likely to quit if their employer offered additional work flexibility and paid parental leave.
  • Millennials express a greater willingness to change jobs, take a pay cut or move to another country to have access to better parental leave benefits.

Source: Ernst and Young. Study: Work-Life Challenges Across Generations. 2015


A global spectrum of paid leave

Unfortunately, the U.S. is lacking a national paid parental leave policy compared to, well, just about every other country. As of November 2021, it’s the only wealthy country without guaranteed paid parental leave at the national level, based on data from the World Policy Analysis Center.

Across Organisation for Economic Co-operation and Development (OECD) countries, mothers are entitled to just above 32 weeks on average for paid parental and home care. However, 11 OECD countries offer none at all. While some countries provide more than six months of paid maternity leave, the average is just under 19 weeks. New fathers average just above 10 weeks of paid leave.

Some countries allow paid family leave to be shared between parents. Although mothers take the majority, the other partner can use parts of their collective entitlement – on average 25.4 weeks for OECD countries.

Time to benefit

Research shows the benefits of paid leave on physical and mental health, and family stability. The American Psychological Association reported that paid parental leave can reduce financial stress, empower parents to focus on bonding with their kids, and increase gender equality when fathers are provided time to share in childcare duties. 

More collaboration between psychologists and economists could help quantify outcomes – such as reduced healthcare costs, more happiness, job retention – in a way that’s meaningful on a policy level.

Next steps

Before heading overseas to start your family, consider:

  • Looking into your state’s paid parental leave policies.
  • Reviewing your company’s employee handbook to see what options are available.
  • Discussing your overall financial plan with your advisor to help guide your decisions based on your personal situation.

Sources: Center on Budget and Policy Priorities; National Institutes of Health; American Psychological Association; Organisation for Economic Co-operation and Development; Bipartisan Policy Center; U.S. Bureau of Labor Statistics

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