Economic and Social Benefits of Paid Parental Leave



The Centre for Future Work conducts and publishes progressive economic research on work, employment, and labour markets.

With their partners at the Nordic Policy Centre (a new project also associated with the Australia Institute), the Centre for Future Work recently hosted a seminar in Sydney by Dr Ásdís Aðalbjörg Arnalds, a professor from the University of Iceland, to share findings of her research into the impacts of Iceland’s innovative paid parental leave program.

Iceland’s system not only provides a generous amount of paid leave (with benefits equal to 80% of normal earnings), it has also implemented a “quota” system whereby fathers (or non-birth parents in the case of same-sex couples) face a “use-it-or-lose-it” incentive to take their own leave: the benefits are available only to the non-birth parent, and cannot be transferred to the birth mother.

Under this system, the proportion of fathers (and non-birth parents) taking parental leave has doubled from 40% to 80%. Arnalds’ research has identified dramatic and far-reaching benefits from this change: including a boost in women’s labour force participation, more equal sharing of parenting duties (visible even years after the leave is completed), happier parents and children, and even better life expectancy for fathers. This is powerful evidence that achieving better balance between work and family life, and a more equal sharing of parental and other caring duties, offer tremendous benefits for well-being.

Please read Alison Pennington’s useful summary of Arnalds’ findings for more detail.