Parental Leave Policy in Canada, Sweden and Australia

Canada

The recent past decades have seen an increase in labor force participation by women. However, considerable gender gaps or disparities in income, working hours, job class, representation, and career progression still exist (Statistics Canada, 2019). Several policy measures have been implemented to tackle the persistent gender disparities in labour market outcomes. Family oriented policy, especially those that extend to both parents, such as the parental leave policy is one of such. Family policy including job protected family leave (parental leave) plays a crucial role in child health, parental wellbeing, promoting women labour force participation and enhancing gender equality (Margolis et al., 2019). Beyond directly influencing economic outcomes, this policy targets social norms which influence gender identity of men and women and interpretations of gender roles, ultimately eliciting varying labour market outcomes for men and women (Unterhofer & Wrohlich, 2017) . Supporting the employment of mothers and increasing the uptake of leave by fathers are important in fostering gender equality (European Institute for Gender Equality , 2019). The Parental Leave Policy in Canada is an important case study because of its evolution over the years to increase women participation in labor, recognise the importance and role of both parents in caregiving as well as its flexibility to provide varying leave duration options.

The Parental leave policy in Canada oversees the provision of Employment Insurance (EI) parental benefits to parents caring for newborn or newly adopted children. Two benefits options -differing in payment and claim period, weekly benefit rates, allowable leave period- fall under this policy. The Standard parental benefit option allows payment of benefits for up to 35 weeks (flexible enough to be shared by two parents) which must be claimed within 52 weeks following childbirth or placement for adoption. Claimants, who are usually biological, adoptive, or legally recognized parents, receive weekly benefit rates corresponding to 55% of the claimant’s average weekly insurable earnings (up to a maximum amount). The same applies to the extended parental benefit option except that payment is made over a longer period (61 weeks) but at a lower weekly benefit rate (33%) and can be claimed up to 78 weeks following child birth or placement for adoption. To be eligible, claimants must be engaged in insurable employment, experience a reduction of over 40% in normal weekly earnings and must have accumulated at least 600 hours of insurable employment during the qualifying period or have earned enough money during the qualifying period if self-employed (Government of Canada, 2020)

Although there is a significant portion of mothers who do not receive parental leave, majority of Canadians have access to a year off period to take care of their newborns. Quantitative data reported by Statistics Canada (2014) indicates that accessibility to parental leave has exponentially increased over the past decade particularly among low income households. The study posited that numbers of mothers who have access to parental leave from low income families has improved by 42%. The Canadian parental leave policy supports the increasing uptake of leave by fathers which fosters gender equity. Canada offers generous parental benefits making the policy suitable. The suitability of the policy is increased by the ability of either spouses to share the parental benefits ( Mahon & Brennan, 2013) . However, the dramatic increase in the uptake of parental leave benefits stands to jeopardize the sustainability of the policy. In future, the Canadian government will be compelled to solicit other sources of funds such as tax increment to sustain the current parental leave benefits. The Canadian parental leave policy can be integrated with other policies such as career development. For example, parents who partake parental leave can take online courses while at home to advance their career. 

Sweden

The Swedish parental leave policy was established by the Parental Leave Act 1995:584. As expatiated by section 1 of the policy, employees have an entitlement as parents to a leave from their employment in accordance with the stipulations of the act. The Swedish parental leave extends to an employee who although not a biological parent, takes care of the child as the legal custodian, has taken a child for fosterage and permanent care into their home, and an employee who is permanently residing with a parent provided he or she is married or has sired a child with that parent ( Ekberg et al., 2013) . Section 3 of the Act 1995:584 provides entitlement to six types of parental leaves. The six include maternity leave, full parental leave with or without benefits, partial leave with parental benefit, partial leave without parental benefit, leave with temporary benefit and leave with child care allowance. The parental leave policy is integral in enhancing a child’s health and promoting parental well-being. 

In an attempt to address gender inequality, the Swedish parental leave underwent a reform to give fathers an incentive to take parental leave. The policy changes were meant to contribute to improvements in gender roles and foster a more equal labor market outcomes. As explained by Ekberg et al., (2013), increase in fathers’ uptake of parental leave means an even distribution of work interruptions between men and women, implying that women gain better opportunities for development and career progress. The effected reform on parental leave policy by the Swedish government not only addressed the gender roles but also reduced the scope of discrimination. Prior to the reform, there existed statistical discrimination against men who would more often be denied parental leave. The evolution of the Swedish parental leave takes cognizance of the need to increase women participation in labor force and underscores the essence of involving both parents in care giving. The reforms played a critical in introducing flexibility as evidenced by the transferability of shared parental leave days.

The parental leave duration in Sweden is dependent on a number of variables. The first applies to the case of two parents who share the leave days. In this case, the parental leave duration lasts for 480 for one child. The second one applies to parents who have sole custody of a child. The sole custody parents are also entitled to 480 days for one child. The third variable applies to parents who have multiple children for example twins, triplets etc. Parents with twins are entitled to 660 days, three children 840 days while those with 4 children are granted a leave duration of 1020 days ( Ekberg et al., 2013) . The parental leave days do not expire until a child attains 8 years. As signatory to the Nordic countries, Sweden has a parental leave that is partly transferable. The policy strictly reserves 90 days for the mother and other 90 days for the father. The 90 days of parental leave in Sweden cannot be transferred to an employee’s spouse. Flexibility is therefore affected adversely by the non-transferability of the 90 days leave. The non-transferability increases participation of men in child care. However, the remaining leave days can be transferred between parents. 

As for the pay during parental leave, employees receive 80% of their emolument with a cap of SEK 1006 per day. In Sweden, the parental benefit that is determined by one’s income is termed as parental benefit at sickness benefit level. To receive the parental benefit, an employee must have had a yearly income of at least SEK 82,100 and worked for a minimum of 240 days prior to the delivery date ( Ginja et al., 2020) . Claimants who have worked for less than 240 consecutive days before delivery receive SEK 250 per day for the first 180 days which is equivalent to SEK 7,500 a month. After both parents have exhausted the first 180 days, the parental benefit paid is based on their income, but should be a minimum of SEK 250 per day. All Swedish mothers and fathers have access to the provided parental leave policy. Although a small percentage of parents in Sweden have a limited access to the policy, the national uptake of parental leave has significantly increased due to strict enforcement laws. 

Sweden offers generous income replacement and exhorts fathers to participate in a child’s early years thereby making the policy suitable and inclined towards promoting gender equity ( Ekberg et al., 2013) . The Sweden’s parental leave policy is effective, comprehensive, but expensive which makes it unsustainable. The parental leave costs approximately 0.8% of the nation’s GDP. The tax to GDP ratio resulting from the public spending on parental leave stands at over 50%, one of the highest in OECD countries. The Swedish parental leave policy can easily be integrated with other policies such as health and safety and anti-discrimination policy. 

Australia

Australia was one of the OECD countries that had not devised a national parental leave scheme by 2010. However, during the 2009/2010 budget, a paid and unpaid parental leave plan was introduced by the Australian labor government whose implementation commenced on January 1st 2011 ( Newsome, 2019) . The Australian parental leave policy targets employees who have given birth, an employee whose de facto partner has given birth and a worker who has adopted a child aged 15 years and below. The goal of the policy is to support and protect working parents during childbirth or adoption of a child. The policy incorporated gender equity goals with an objective of fostering gender equality in work and family realms. The introduction of paid parental leave for each parent, played an instrumental role in fostering a more equal division of paid and unpaid work and led to significant improvement of family work life balance ( Hewitt et al., 2017) . The Australian parental leave policy embraces a combined approach which provides some flexibility on when either parent can apply for a leave. 

In Australia, employees who are the primary care givers of a newly adopted child or a new born are entitled to a paid parental leave duration of up to 18 weeks, equivalent to 90 payable days. In addition, parents or caregivers have right to an unpaid leave of 12 months and can request an extension of 12 more months. Employees granted a parental leave to take care of an adopted child have a right to a pre-adoption leave of 2 days to attend relevant examinations or interviews. The Australian parental leave is granted employees who have worked for an employer for a period of at least 12 months prior to the delivery date or the date of adoption ( Newsome, 2019) . The policy in Australia allows employees for use flexible parental leave pay. Employees who wish to transfer their parental leave days to their partner can do so by entering into an agreement with their employer about its workability ( Hewitt et al., 2017) . Flexibility is permitted in form of reducing hours or days, changing the leave pattern or taking an additional leave. 

The parental leave pay is calculated based on weekly rate of the national minimum wage. Currently, the parental leave pay is $150.78 per day prior to tax. Access to parental leave by fathers is limited due to personal, financial and cultural barriers that constrain the uptake of the leave by Australian men. The suitability of the policy is enhanced by the transferability and the room for participation of fathers in child care. The Australian parental leave policy promotes gender equity as it encourages fathers to take an active role in child care. The adoption of a hybrid system where the both the government and employers contribute to the parental leave policy enhances the future sustainability of the policy. Unlike Canada and Sweden which sorely rely on either government or employers funding, the Australian policy combines both leading to enhanced sustainability. The policy is comprehensive as it provides flexible and adequate maternity and paternity paid leave with various benefits such as job security after leave days are over ( Newsome, 2019) . The policy is integrated with other human resource policies such as the antidiscrimination policy to discourage denial of leave or unfavorable treatment of parents by either the government or private employers. 

Table of Comparison

Comparison Criteria	Canada	Sweden	Australia
Leave duration	Standard parental benefit-35 weeks Extended parental benefit-61 weeks	Two parents who share the days-480 days Twins-660 Triplets-840 Quadruplets-1020	Duration of up to 18 weeks
Pay during leave	Standard - 55% of weekly insurable earnings-translates to $573 weekly up to 35 weeks Extended-33% of weekly earnings-$344 weekly up to 61 weeks	Employees receive 80% of their salary with a cap of SEK 1006 per day	Pay is calculated based on weekly rate of national minimum wage Leave pay is $150.78 per day prior to tax
Transferability/ flexibility	Flexible enough to be shared by two parents	Partly transferable	Employees who wish to transfer their parental leave days to their partners can do so by entering into an agreement with their employer about its workability/ fully transferable
Accessibility	Majority of Canadians have access to a year off period to take care of their newborns	The national accessibility of parental leave has significantly increased due to strict enforcement	Improved accessibility nationally
Equity	Supports the employment of mothers and encourages uptake of leave by fathers to foster gender equality	Sweden encourages both the mother and fathers to participate in a child’s early years thereby meaning that the policy is inclined towards promoting gender equity	Promotes gender equity as it encourages fathers to take an active role in child care
Suitability	Suitability of the policy is increased by the ability of either spouses to share the parental benefits	Offers generous income replacement both parents to participate thereby making the policy suitable	Suitability of the policy is enhanced by the transferability and the room for participation of fathers in child care
Sustainability	Dramatic increase in the uptake of parental leave benefits makes it expensive to sustain in future	Costs approximately 0.8% of the nation’s GDP. Expensive, making it unsustainable	Adoption of a hybrid system where the both the government and employers contribute to the parental leave policy enhances the future sustainability
Comprehensiveness	Canada provides a comprehensive paid policy for mothers and fathers which caters for all child care needs	Provides comprehensive support system for working parents characterized by extensive goals to incorporate women in labor market	Offers comprehensive benefits
Integration with other policies	Integrated with HR policies such as employee career development	Integrated with other policies such as health and safety and anti-discrimination policy	Integrated with antidiscrimination, health and safety policies.

Policy Analysis

Parental leave conditions may impede or promote gender equality and work life balance outcomes. According to gender equality index 2019, the traditional gender work roles and expectations have been disrupted by the decline of the male breadwinner family model and the increase in female employment rates ( European Institute for Gender Equality, 2019) . 

Sweden ranks as the first nation to implement a gender neutral parental leave benefit. The Swedish policy is designed to support dual-earner family model, a cornerstone for promoting gender equality and an integral pillar of the gender equality policy ( Ekberg et al., 2013). Men and women in Sweden are entitled to 480 parental paid leave days per child with 90 days reserved for each parent implying that they cannot be transferred to the other partner. The remaining days are transferrable, making the policy largely flexible. Introducing the 3 months reserved for each parent was a measure to achieve gender equality in the labor market and even distribution of child care work (Haas & Hwang, 2019). Similar to the Swedish policy, the parental leave policies is Australia and Canada are inclined towards offering equitable parental leave for both parents. Canada and Sweden have partly transferable/flexible policies since some of the leave days are strictly reserved to each parent and cannot be transferred. The Australian policy however has no such restrictions and is flexible enough to allow sharing of all leave days. The three countries differ in respect to leave duration as each has a distinct number of days. While on one hand Canada has two leave durations that is, standard and extended parental benefit options each with 35 weeks and 61 weeks, on the other hand, Sweden and Australia have a leave duration of 480 days and 18 weeks respectively.

GBA Analysis

Canada

The GBA+ is a tool or process applied to government policies and programs to analyse the diversity of implications of these programs and policies on women, men, and other gender. These tools assess how diverse gender groups experience the implementation of programs and policies. Beyond gender, the GBA+ extends to other factors that interact and determine an individual’s identity such as race, ethnicity, religion, age, and mental or physical disability and how they experience government policies and initiatives. The GBA+ is important for program evaluation and process improvement. 

The application of the parental leave policy through the GBA+ is important for many reasons. First, the gender inequality and division of roles and responsibilities of work within the family and labour force remains a central theme of this policy discourse. Secondly, the intersection between policy design and outcomes; that is how parental leave policy design could lead to heterogeneous or differential outcomes through unintended consequences that may foster, hinder, or exacerbate gender inequality (Margolis et al., 2019). More so, how other factors that characterize an individual, including social and income class, determine access or use of these policies which in turn shape policy user experience and outcomes.

The succeeding paragraphs will expatiate on the gendered use and implications of this policy. There will also be focus on other factors -particularly income and job class- as they affect the eligibility, accessibility, and outcomes of parental leave policy.

Parental Leave Benefit: Intent, Equity, Flexibility and Gendered disparity in outcomes

Parental leave policies have been determined to have family related, health and economic benefits. These policies foster bonding between parents and infants at the critical early childhood stage (Huerta et al., 2013). They help build and improve family relationship and acts as a protective factor against work-family conflict/stress that occur post childbirth (Annink et al., 2016). Economically, parental leave increases and retains labor force engagement among women (Ruhm & Waldfogel, 2013). These policies also reduce employee turnaround thereby saving employers cost. Health wise, the leave is equally beneficial through the prevention of post-natal depression and stress build up (Sejourne et al., 2012). Importantly, these policies -hinged on a dual earner and dual carer system- encourage the involvement of fathers in childcare and foster gender equality in household wage (Abbot et al., 2013). Also, the evolution of this policy to allow flexible transfer of parental leave between parents grants some level of autonomy to parents to allocate paid work and time (standard vs extended) to suit their own needs.

While on one hand the parental leave has the aforementioned advantages, on the other hand longer leave period (one year and above) can undermine a woman’s career progression through a disproportionate uptake of care duties and career break. Research has shown links between longer parental leave and reduced wages, delayed career progression, employment gaps and labour market exit (Hideg et al., 2018). Several explanations have been suggested for these negative outcomes (Morosow, 2019). To start with, prolonged leave -more of which are taken by women- lead to human capital depreciation, which is often measured in wages or ability to stay in workforce. Secondly, Employers implicitly make hiring decisions based on the assumption of higher future uptake of parental leave thereby statistically discriminating against women which further widens the occupational gender disparity. Lastly, social norms and stereotypes, in particular, towards women’s traditional gender roles, concepts of masculinity as well as interpretation of leave uptake as low commitment to work, both contribute to lower return of women to or exit from labour market and poor uptake of parental leave by men. Available data pointing to very low uptake of parental leave by men (Statistics Canada, 2014) further suggest female dominance in leave uptake. 

In summary, parental leave by its design may not increase maternal employment, bridge gender gaps in labour participation or increase the participation or involvement of men in childcare and household duties.

Inequalities in Access and Use Canadian 

Employment characteristics including job type (permanent, part time) and income class are determinants of access and use of leave benefits. How parents access and who is eligible or not to use these benefits are tied to these characteristics. For example, evidence indicate that while women take up the leave benefit the most, men have a 3% higher eligibility rate than women (92.3% vs 89.2%) (Employment and Social Development Canada , 2013). This paradox is explained by the job type engaged in by most women. Women are more likely than men to work in part time jobs (Statistics Canada, 2018) thereby accumulating fewer insured hours. A recent study examining how use of parental leave differed by family income in Canada observed an increased use of parental leave among high income households (Margolis et al., 2019). Results from this study indicate that only 43 per cent of Canadian mothers from households earning less than $30,000/year received paid parental leave through EI, in contrast to 74 per cent of those with household incomes of $60,000 or more. Similar trends were found in an earlier study by McKay et al., (2016).

An eligibility criterion is the requirement to accumulate at least 600 hours of insurable employment. Insufficient work hours have been cited as a barrier to Parental leave benefit. Meeting the 600-hour threshold may be challenging for younger workers (under age 25), particularly women not in full time employment (Robson, 2017). For example, an EI insurance Monitoring and Assessment report which compared job type (focus on working hours) and accessibility of the employment insurance benefit, found that 96.6% of fulltime workers would have accumulated sufficient work hours to qualify for EI benefits compared to only 64.6% part-time workers (ESDC, 2013). Again, not all jobs qualify for insured income. All of this combine to systematically exclude women of certain job class from the parental leave benefit.

In summary, the parental leave benefit seems designed-albeit unintentionally-in such a way that attachment of parent to labour market (as measured by job type, working hours, income class) is a determinant of access to or outcome of the parental leave benefit.

Effectiveness

Despite the evolution of the Parental leave benefit policy over the years and available evidence to show the policy design is working for some-not all- families, a number of gaps in effectiveness still exist. These gaps lead to unintended consequences of excluding certain class of people especially women of particular income and job class from accessing these benefits and leading to disparity in outcomes. Effectiveness-how accessible and adequate the benefits as determined by policy design-should continually be evaluated to improve policy implementation and inform best practices. Efforts should also be made to support policy designs that encourage increased leave uptake by men

Sweden

In 1974, Sweden introduced a parental leave reform that gave fathers the same rights to use parental leave as mothers. The parental policy is designed to support maternal and paternal health including the well-being of newborns. The Swedish parental leave policy exhibits a strong orientation towards support for dual earner family (Ginja et al., 2020 and Abbott et al., 2013). Both parents take part in child care work and labor market and are entitled to the earnings related parental insurance benefits. The policy design is oriented towards promoting equality between men and women in terms of equal employment opportunities and equal distribution of domestic tasks ultimately leading to changing of the traditional gender stereotypes (Almqvist & Duvander, 2014 and Wells & Sarkadi, 2012). The transferability of the Swedish policy allows parents to tailor make the parental leave days in a manner that suits their needs.

Admittedly, while the Swedish parental leave model has notable advantages, the policy is obviously not faultless. Mothers in Sweden still have the largest share of unpaid household and child care work. A study by Duvander et al., (2019) indicated that fathers in Sweden use only 20% of the allocated parental leave days. The parental leave policy in Sweden is still attached to long-lived structures which maintain that males and females have different opportunities in the labor market. Although above the European average, the fertility level in Sweden is still below replacement level. In addition, individuals who have weak labor market attachment and students may not benefit from the parental leave earnings related benefits, something that compels some parents to postpone child bearing or suffer from increased poverty. 

In summary, the Swedish parental leave by design may not reduce gender inequality and promote increased women participation in labor market as intended due to the aforementioned drawbacks that may reverse the gains made in the long run.

Australia

The Australian parental leave policy has evolved towards gender neural inclination by offering equitable parental leave for both mothers and fathers. Studies indicate that adequate maternity and paternity leaves lead to reduced infant mortality, increased breastfeeding rates and improved health benefits for the mother (Del Carmen Huerta et al., 2013). The Australian gender neutral parental leave promotes higher female labor force participation, leads to more equitable division of household labor, improves children developmental outcomes and results in increased child bonding. Previous studies have linked uptake of parental leaves by fathers to increased earnings for mothers, higher female employment in private sector and reduced mother absenteeism due to ill health (Del Carmen Huerta et al., 2013). 

The parental leave policy in Australia is also laden with several drawbacks. The flexibility of the Australian system characterized by transferable rights implies that the largest part of the parental leave days is taken by mothers, thereby jeopardizing women’s ability to compete in the labor market on equal terms with males. Access to parental leave by fathers in Sweden is still below par due to personal, financial and cultural barriers that constrain the uptake of the leave by Australian men ( Khanam et al., 2016) . The gender-based division of parental leave lead to preservation of gender based inequalities and traditional gender roles.

In summary, the Australian policy by design may also not fulfill the objectives of gender equality and higher female labor force participation due to the reluctance of fathers to take parental leaves and continued maintenance of gender roles.  

Effectiveness

The Swedish and Australian parental leave policies have played a key role in minimizing the gender inequalities that existed in the two nations. A growing body of research indicates that the uptake of parental leave by fathers has contributed to an increase in earnings for the mother in Sweden. Significant milestones have also been realized in Sweden and Australia due a notable increase in female participation in labor force. Effectiveness gaps also manifest in both countries particularly related to access of parental leave by low income earners. 

Summary and Recommendations

The Canadian, Swedish and Australian parental leave policies oversee the provision of parental benefits to mothers and fathers for newborns or for adopted children. The three countries have made substantial milestones characterized by introduction of a dual earner model, where both parents have equal rights pertaining participation in child care. Analysis of the three nation policies reveals notable similarities and distinct differences. Differences manifest in leave duration, pay during leave and flexibility of transfer. The three are however similar with respect to introduction of a dual earner approach to child care. 

As a policy recommendation, men should be encouraged to utilize the parental leave policy in the three countries. Measures that can be taken to reduce disparities in parental leave between men and women include allocation of a bonus to parents who share parental leave entitlements equally. The incentive would encourage men to participate in child care leading to equal distribution of household duties between men and women and better father-child bonding. Additionally, the Australian policy should consider adopting the approach taken by Canada and Sweden by reserving some months strictly for each parent to encourage participation by men. 

References

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