Family Leave Policies Are Supposed to Help Women. Instead, They Trap Them.
Yes, there are unintended consequences to requiring employers to offer family leave benefits.
On Mother's Day this year, Hillary Clinton released a short video calling for the United States to adopt paid family leave policies. The U.S., she said, in support of her call, is "the only developed country" that doesn't require employers to offer paid leave.
Paid family leave requirements and other related benefits for working parents are indeed common around the rest of the world, and they are intended to make life friendlier for women who work and have families. But as The New York Times notes this morning, these policies come with trade-offs: Even as they make it easier for many women to both work and parent, they also seem to make it harder for women to earn more and rise higher in the workplace.
That's true in places like Chile, which since 2009 has required most companies with a sizable number of women employees to provide. Yet as the Times notes, a new study finds that when women are hired on, they are now likely to be paid substantially lower salaries than before the requirement went into effect. Initial monthly wages are about 9 to 20 percent lower for women, the study found by comparing wages from before and after the policy.
There's a similar story in Spain following the implementation of a policy allowing parents of young children—mothers or fathers—to request a reduction in work hours without being fired. Yet as the Times notes, following the implementation of the policy, fewer women climbed workplace ranks to senior positions:
Those who took advantage of it were nearly all women.
Over the next decade, companies were 6 percent less likely to hire women of childbearing age compared with men, 37 percent less likely to promote them and 45 percent more likely to dismiss them, according to a study led by Daniel Fernández-Kranz, an economist at IE Business School in Madrid. The probability of women of childbearing age not being employed climbed 20 percent. Another result: Women were more likely to be in less stable, short-term contract jobs, which are not required to provide such benefits.
In fact, results like this are extremely common wherever employers are required to offer mandatory family leave benefits. The same researchers looked at 22 different countries and found that, in general, they brought more women into the workforce than in the United States, but those women in those countries were less likely to reach higher-paying positions with greater authority. As the Times article puts it, the policies meant that women "were more likely to be in dead-end jobs and less likely to be managers."
The Times' Facebook feed gives the story a whodathunkit?! subhed that starts with "it turns out…" but results like these are the opposite of surprising: When employers have to pay for a benefit, the cost of providing that benefit tends to come out of wages, and employers become more reticent to promote individuals who may be less available to work.
That's true even in the United States, which does not have a federal paid family leave policy but does require larger employers to offer 12 weeks of unpaid family leave. And yet even that comparatively minimal leave requirement appears to have had unintended consequences for women in the workforce: "Women are 5 percent more likely to remain employed but 8 percent less likely to get promotions than they were before it became law," according to an unpublished study, the Times reports. It is a policy that is helping more women work, yes, but holding others back.
The surface appeal of family leave requirements is obvious, but the results of these policies are, at minimum, more complicated and less beneficial to working women than most backers seem to hope. If anything, for those who hope to empower working women, family leave requirements may end up having the opposite of their intended effect, by making employers view them warily, as potential liabilities rather than as full-fledged, productive members of workforce. This may be the most insidious effect: By elegating more women to those "dead-end jobs," these policies and their effects may contribute to the perception that women are not up to the highest demands of the workplace, and that they are most suitable for jobs that don't pay very well or confer a lot of responsibility. Which is to say that instead of helping women, these policies may be trapping them.