Parental Leave: Costs and Benefits

How paid parental leave works around the world, what research finds about its effects on parents, children and employers, and why design matters.

When a baby arrives, parents need time to recover and care for the child. Parental leave gives them time away from work, often with some pay and a guarantee that their job will be waiting. Countries differ enormously in how much leave they offer.

Around the world

Almost every country offers some paid maternity leave. The International Labour Organization’s standard, set in a 2000 convention, is at least 14 weeks. Several Nordic countries offer a year or more of paid leave shared between parents. The United States is an outlier: it has no national paid parental leave, though a 1993 law gives many workers up to 12 weeks of unpaid, job-protected leave, and some states and employers offer paid leave.

What leave does

Research suggests several effects:

Keeping mothers in work: job-protected leave of moderate length can help mothers return to their jobs rather than quitting.
Child health: some studies link paid leave to better infant health and more breastfeeding.
Very long leave can backfire: several studies suggest leave lasting well beyond a year can hurt mothers’ careers, as skills and connections fade.

Getting fathers involved

Paternity leave has become a focus of policy. When leave can be shared freely, mothers usually take most of it, reinforcing the pattern that mothers step back from paid work. Some countries now reserve part of the leave for fathers on a use-it-or-lose-it basis. Norway introduced such a quota in 1993, and fathers’ use of leave rose sharply. Researchers study whether this changes how couples share childcare and housework in the long run.

The use-it-or-lose-it rule

Suppose a country offers 12 months of paid leave to share. Most couples decide the mother will take all 12 months. If the rule instead reserves three months only for the father, the family either uses those months or loses them. Many more fathers then take time off, and more mothers return to work sooner.

Who pays?

Paid leave is usually funded by social insurance, taxes or employers. When employers bear the full cost directly, they may be tempted to avoid hiring workers they expect to take leave, which is one reason economists often favour funding through social insurance.

Thinking longer leave is always better for mothers

It seems natural that more leave is always better. But evidence suggests the benefits for mothers' careers are largest for moderate periods, and very long leave can make it harder to return. How leave is designed matters as much as how long it is.

Key takeaways

Almost all countries offer paid maternity leave; the United States has no national paid leave.
Moderate, job-protected leave helps mothers stay in work and can benefit infant health.
Very long leave may harm mothers' careers.
Reserving leave for fathers greatly increases how many fathers take it.