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For economic growth, send the men home   

Research finds the UK’s measly paternity leave is a drag on the economy.

By Alona Ferber

One thing Labour and the Conservatives agree upon is the urgent need for higher economic growth. First among Keir Starmer’s five missions is a promise to “secure the highest sustained growth in the G7” ; Rishi Sunak has pledged that he would “grow the economy” while his predecessor, Liz Truss, said her priorities were “growth, growth and growth”.   

To this end both parties have acknowledged that the cost of childcare, and the fact that it keeps many women out of work, is a factor in achieving GDP increases. In March Jeremy Hunt helped himself to Labour’s long-touted childcare reform policy with a plan to extend subsidised childcare down to the age of one, in part to increase women’s participation in the economy. Labour, aside from what it may or may not end up doing on childcare (last week a Labour spokesperson confirmed universal childcare was never its policy), has made a point of focusing on mid-life women caught between the demands of work and the responsibilities of parenting. Increasing the employment rate of women aged 50-64 to pre-pandemic levels could, according to Labour, add up to £7bn to the economy.

However, new research published last week by the campaign group Pregnant Then Screwed, the Centre for Progressive Policy (CPP) think tank, and Women in Data makes the case for an economy-boosting reform focused on fathers, not mothers: better paternity leave.

The report says that more fathers taking more paternity would benefit the economy because it would help to close the gender employment gaps that, the organisations find, hold back economic output by £23bn a year.

Based on an analysis of OECD data, the report found that the gender-wage gap is smaller by 4 percentage points in countries with more than six weeks of paid paternity leave. In these countries, the labour force participation gap is also 3.7 per cent smaller. It concludes that addressing these issues in the UK would add up to a 1 per cent increase in GDP.

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The UK has “the least generous paternity leave entitlement in Europe”, according to the report. The statutory entitlement for fathers is two weeks at £172 per week, or 44 per cent of the national living wage. Mothers get a statutory minimum of six weeks leave at 90 per cent of their existing pay. Not overly generous either, but a better deal than the dads.

[See also: Childcare costs are failing mothers and the economy]

Mothers tend to take longer periods of leave at the start of their child’s life, and they tend to drop out of the workforce or go part-time because of childcare at a higher rate than men. The pandemic exacerbated this fact, and now, for the first time in years, a growing number of women are leaving the workforce because of caring duties. According to government statistics, among women aged 25-34, last year this increased by 12.6 per cent. Between October and December 2022, says a House of Commons research paper, 5.2 million women aged 16-64 were “economically inactive”. Of these, 1.5 million were inactive because “they were looking after their family or home”, compared with only 200,000 men who were inactive for the same reason. This was also the leading reason for women not being in the workforce; 1.1 million women were inactive because they were studying and 1.3 million because of long-term sickness.

The research shows that more women dropping out of the workforce is not just a cultural problem but an economic one. The Pregnant Then Screwed, CPP and Women in Data report finds that 22 per cent of fathers and partners eligible for the statutory two weeks of leave don’t take it, and that in 43 per cent of cases, those who went back to work early did so because “financial hardship” made taking the maximum time unaffordable.

In 2015, the UK introduced shared parental leave to enable parents to split their leave, so fathers could take more than the two week entitlement. But uptake has been minimal – 2 per cent of all eligible parents used shared parental leave in 2019. This is partly due to how socially acceptable it is – or isn’t – for fathers to stay home with a baby but also because, for most new dads, their portion of shared parental leave is unpaid.

When better paternity leave is offered, more people use it. Aviva, the insurance company, has given employees up to one year of leave and up to 26 weeks at full pay for parents since 2017. According to their data, 80 per cent of fathers have taken at least five months of paternity leave.

There is evidence, too, that better paternity leave brings shifts in deeply entrenched gender biases that hold women back from employment and leadership. Spain introduced two weeks of paid paternity leave, up from only two days, in 2007. Uptake has been high – 60 per cent – and new research conducted on children born in 2006 and 2007 concludes that “the introduction of paternity leave led to children displaying significantly more gender-egalitarian views”. Shifting these norms is key to achieving gender equality – which, as the latest UNDP Gender Social Norms Index confirms, is also an economic benefit.

Better paternity leave would also be an act of kindness. As anyone with a newborn can attest, those early weeks are rife with disruption, sleepless nights and stress on relationships. Many fathers and partners spend the first year of their baby’s life struggling not to fall asleep at their desks. In fact, the study found that just 18 per cent of respondents think the statutory minimum is enough – and that 63 per cent of recent fathers “did not feel mentally ready to return to work when they did”.

[See also: The parent trap: how to fix Britain’s childcare crisis]

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