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Author Topic: How Parental Leave Promotes Inequality
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A new essay from The Libertarian Institute. Too long to post here in full, but well worth a read. Here's a snippet:

Parental leave also has a cost for employers. The cost of this type of benefit will depend on the length of the leave offered and how easy it is to find someone else to cover the job during an absence. Employers might have to pay fellow employees overtime to cover the extra work or even hire a contractor. The more unique and essential the job is, the more expensive it will be to grant a long leave. Then, once the total raw cost of the leave is determined, the employer has to estimate the probability that a prospective employee is actually going to take advantage of this benefit in the near future.

This probability consideration is what leads to the unintended consequences. By default, most employers probably are not going to ask awkward family planning questions in a job interview. Instead, they are more likely to estimate the probability, consciously or not, based on demographics.

Thus, all else equal, a 20-something female who recently graduated college would be viewed as much more likely have a child in the near future than a 45-year-old male. In turn, that means the expected cost (probability x raw cost) of the leave benefit for the 20-something female is higher than the expected cost for the male. Since employers are generally willing to pay a certain all-in cost, they might respond to this circumstance by choosing the male employee (because he’s cheaper) or by hiring the female at a lower salary (to compensate for the higher leave cost). Either outcome clearly leaves the female candidate at a disadvantage, through no fault of her own.

This outcome is not ideal, but it is the way that trade-offs work in compensation. A faster phone means a higher price. A longer or more likely leave benefit means a more expensive employee.

This then leads to a perverse outcome. In general, the same people that advocate most for mandatory parental leave are also the ones that are concerned about the gender pay gap–the idea that men make more than women in work place. Ironically, mandatory parental leave policies would have the effect of exacerbating any gap that currently exists....

Read the whole thing at the link.

Onward and upward,

[ 05-19-2017, 12:11 PM: Message edited by: airforce ]

Posts: 17066 | From: Tulsa | Registered: Jan 2002  | Report this post to a Moderator

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