In­dia is beat­ing US at Paid Ma­ter­nity Leave

The HR Digest - - HR Drift -

In In­dia, less than 30% of women work - the most re­cent avail­able data- and the deficit costs the coun­try an es­ti­mated 2.5 per­cent­age points of gross do­mes­tic prod­uct per year. Last year, the up­per house of the par­lia­ment made an at­tempt to fix the prob­lem by dou­bling its man­dated paid ma­ter­nity leave from three months to six.

On the eco­nomic front, there is plenty of ev­i­dence to sug­gest that women-led de­vel­op­ment in In­dia does not hurt busi­ness and is ac­tu­ally good for the com­pany. More­over, the cost sus­tained by em­ploy­ers in the process (re­im­burse­ments for tem­po­rary re­place­ments) is de min­imis. To quote a re­port by Mckin­sey Global In­sti­tute (Novem­ber 2015), “Achiev­ing gen­der equal­ity in In­dia would have a larger eco­nomic im­pact there than in any other re­gion in the world - $700 bil­lion of added GDP in 2025 – but com­pre­hen­sive change is needed.”

In­ter­ven­tion from the gov­ern­ment in the form of en­act­ment of laws ce­ment­ing women in the work­force is a much needed mea­sure. Women in In­dia are largely un­der­em­ployed or un­em­ployed, and bring­ing them into the econ­omy by mak­ing it eas­ier to have a child and yet pur­sue a ca­reer is piv­otal. No coun­try is go­ing to grow with­out women grow­ing with it.

The ques­tion to be asked is: How will the bill play out in the In­dian con­text? Will this be enough to bridge In­dia’s gen­der gap in the work­force? Or could it make things worse?

The pro­gres­sive law might ac­tu­ally re­duce the num­ber of women in the or­ga­nized work­force. For ex­am­ple, af­ter Spain in­tro­duced the fam­ily-friendly law (Act 39/99) in 1999 al­low­ing all work­ers with chil­dren un­der 7 to work re­duced hours with­out be­ing fired, the en­act­ment spurred the sub­sti­tu­tion of fer­tile-age women away from good jobs and a de­crease of their rel­a­tive pay. Sim­i­larly, when Chile made it manda­tory for com­pa­nies of a cer­tain size to pro­vide free childcare, it was found that com­pa­nies re­sponded by re­duc­ing women’s salaries by nine to twenty per­cent. In­dia is do­ing some­thing sim­i­lar by mak­ing it manda­tory for com­pa­nies with 30 women or 50 em­ploy­ees, which­ever is less, to pro­vide crèche fa­cil­i­ties.

The United States has one of the most re­gres­sive ma­ter­nity leave poli­cies in the world. Amongst Or­ga­ni­za­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment (OECD) coun­tries, it is in the last place tied with Aus­tralia and Por­tu­gal, which also guar­an­tee six weeks. The US is one of a hand­ful of 41 coun­tries that does not of­fer any paid ma­ter­nity leave man­dated by the fed­eral gov­ern­ment. (Six months is the norm in most de­vel­oped coun­tries. A baby needs to be close to mother and ex­clu­sively breast­fed for up to 4 to 6 months.)

Ad­vanced economies of Scan­di­navia, which con­sis­tently stand out in in the World Eco­nomic Fo­rum’s an­nual Global Gen­der Gap Re­port, pro­duce an in­ter­est­ing per­spec­tive. The ex­pan­sion of fam­ily poli­cies has been found to have in­creased women’s la­bor force par­tic­i­pa­tion; it has achieved 72 per­cent fe­male em­ploy­ment, one of the high­est among OECD coun­tries.

The land­mark bill put the rest of the world to ab­so­lute shame. The move places In­dia ahead of Aus­tralia, France, Ger­many, Ja­pan and the US for paid ma­ter­nity leave. Where is the best place to be a mother? Def­i­nitely, not the U.S.

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