According to a Unicef report released in June, the UK is one of the least family-friendly countries in the OECD. Parental leave policies are crucial in a society which values sustainable economic growth because they underpin the development of children, parents and society as a whole. Therefore, the UK is failing to make the most of its human capital whilst also failing to value the people who live here. The Scottish Government has signaled its desire to change things, but with limited power in this area they are constrained in what they can do.
The Unicef report uses 2016 data from the OECD, Eurostat and research articles to rank 31 high and middle-income countries on family-friendly practices. Of the 30 OECD countries in the EU, the UK ranks 28th. As illustrated below, the best performing states are smaller Nordic countries Sweden, Norway and Iceland whilst only Greece and Switzerland trail behind the UK. Similar-sized economies also outperform the UK: with Germany in the top quarter and France not far behind as 10th best.
This ranking is composed of several categories: maternity leave, paternity leave and affordability of childcare. In the UK statutory maternity rights entitle mothers to leave of an equivalent of 12 weeks full time pay in comparison with the EU average of 36 weeks and with the most generous country Estonia, where women get 85 weeks. This means that women in the UK receive three times less than the EU average and seven times less than Estonia.
On paternity rights the picture is equally gloomy, with expectant fathers only being entitled to two weeks full pay in the UK compared to the 3.6 week EU average.
The UK performs most poorly on the metric that measures the affordability of nursery education for under threes. As the graph below shows, 22% of parents with children under three cannot afford formal childcare services. This compares with the EU average of 6.2% and with Sweden where no parents could not afford childcare.
So, why does the UK rank so poorly in comparison to similar, often less wealthy, countries? Unicef’s report found no relationship between the wealth of the country and the quality of parental rights. Instead, they argue that this depends on political priorities as well as attitudes towards women and children.
The UK Government has made steps to improve parental leave policies, introducing shared parental leave in 2015. However, it is not meaningful shared parental leave, but instead transferable maternity leave. This means fathers can have time off at the expense of the mother’s time, which is already among the worst in the developed world.
This may explain the poor uptake. Research by the Trade Union Congress found that only 1% of new parents used this scheme in 2018. Compared to other countries who have introduced a shared leave policy this is unbelievably low: in Iceland this has an uptake of 91%, in Quebec 86% and in Portugal 63%.
The primary reason for this policy failure is that it does not offer parents the same rights. Statutory rights give a woman earning an average annual wage of £27,000 is entitled to six weeks at 90% of pay (£466), plus 33 weeks at £145. A father gets two weeks at £145, regardless of income. This means fathers get around 26 times less, a gender pay gap of 96%. Many fathers simply cannot afford shared parental leave.
The slack created by UK Government policy has been picked up by some private companies. For example, insurance company Aviva introduced a policy of treating mothers and fathers equally.
Some employers make things worse. A 2017 survey published in the Guardian found that 95% supplemented maternity pay above statutory provisions but only 4.4% gave more paternity pay, even for the two weeks men are entitled to.
Crucially private company policies only benefit those who work for there. This is fundamentally unfair and economically short-sighted.
Unicef’s report argues that the benefits of paid paternity leave have a number of positive effects including lower rates of maternal depression, healthier child development and greater investment in children on the part of families. This saves money in future health services, education and benefits the economy.
Existing shared parental leave also exacerbates gender inequalities. Even if both parents are equally willing, women tend to earn less than men skewing the decision towards women taking time out of their career, which stunts it further.
Evidence from countries with better parental leave policies illuminates this. For instance, a Swedish study found that for every month of leave taken by men in the first year, the woman’s long-term salary was 6.7% higher.
Unicef made several recommendations for how countries could improve their policies including removing barriers to take-up of leave; making services more affordable and providing more statutory paid leave.
Parental leave in Iceland is an interesting case study for how things could be better. Iceland radically reformed its parental leave system in 2000, extending the total leave shared by both parents from six to nine months, regardless of employment status. The first six months are equally divided between both parents and the remaining three can be freely divided.
In Scotland, the Government has already signaled its intention towards more investment in parents and families through policies like the baby box. The boxes contain clothing, books and medical supplies – with the box useable as a sleeping space. These have been successful in Scotland, with an 85% uptake, and praised worldwide.
However, as welfare is a reserved issue, more meaningful change to the paternal leave system is not possible without independence. Investing in families is a key pillar in a sustainable economy. The UK has the resources and the wealth to provide better rights for families but is not willing to invest in this. Scotland could.