Starting off right: paid maternity leave and quality childcare

Working women in Latin America have just three months of maternity leave, which is less than the 14 week minimum established by the ILO’s Maternity Rights Convention 183, according to Challenges No. 12, the joint news bulletin published by ECLAC and UNICEF. In Cuba and Venezuela, on the other hand, working women receive 18 weeks of 100% paid leave. As of 2011, working mothers in Chile receive six months of maternity leave; while in Brazil, public service employees are entitled to six months of 100% paid leave. In Bolivia and Venezuela, pregnant employees enjoy job security throughout their pregnancy and for one year after giving birth; while in Chile and Panama, the new mother’s job security benefit extends for 12 months after she returns from maternity leave, meaning that this benefit lasts for an average of 15 months, in total.

Chilean Minister of Labor and Social Welfare Evelyn Matthei said at a seminar at the Chilean Microdata Center in November 2011, that “Extending maternity leave to 6 months helps women stay in the labor market […] but there are other obstacles, such as Law 203. One reason why so few women work in Chile is that this law requires companies with 20 or more employees to pay for childcare: Right now, hiring a man costs the company a minimum of CH$182,000, while employing a woman costs CH$330,000. At the end of the day, this means that women earn less than men, because in practice, companies deduct the cost of the childcare, which amounts to CH$150,000 per month.”

Why advocate for extending maternity leave if it costs the State so much money? Is this a cost-effective policy? And the same question should be asked with regard to childcare/nurseries. Why should these things NOT be paid for by employers, as Minister Matthei suggests?

Sami Berlinski addressed the first question a year ago on the Argentinian blog Foco Económico, when he posted a very good (and short!) review of the evidence on maternal employment and children’s cognitive development, especially in developed countries. He concluded that “inverse associations have been reported between maternal employment and their children’s cognitive development (Rhum, 2004; Dustmann and Schoenberg, 2008; Baker et al, 2008), but such studies are not conclusive…the circumstances of families in Canada are very different from those in Latin America, so the results must be taken with a grain of salt.”

More recently, an article by Pedro Carneiro and colleagues analyzed the long-term effects of paid maternity leave in Norway at the end of the 1970s. They found that after the reform, mothers spent an average of 4 additional months at home with their children. They concluded that the reform dramatically reduced (by 2-2.5 percentage points) school dropout rates among those children, once they reached secondary school. It also appeared to have had a significant impact on their Intelligence Quotient (IQ). The greatest impact was observed in the children of mothers with low levels of education, and in those whose mothers would have taken very little leave time in the absence of the reform. In addition, the impact on dropout rates was not due to IQ, which suggests that perhaps they were the result of improvements in other areas, such as non-cognitive capacities. Finally, the impact appears to be greatest in the first months of life, which is why the questions posed by this study suggest that perhaps breastfeeding and/or maternal bonding are more important than previously believed.

This evidence raises another issue, which is that mothers with lower levels of education tend to have less access to quality childcare for their children. This may explain why they reap the most benefits from extended maternity leave, according to Carneiro and colleagues. Two obstacles will then hinder their access to the labor market: first, their lower level of education, and second, the fact that their employer will have to pay part of their childcare costs. That’s why there’s such a high likelihood that these women will leave the workforce to become stay-at-home mothers. According to the latest available data for Argentina, 61.2% of Argentine mothers overall work outside the home; however, there is a gap according to socioeconomic status. While 66.1% of non-poor mothers work outside the home, only  48.9% and 47.1% of the poor and the extreme poor do so, according to the Maternity Observatory Foundation.

If we want to give the children of working mothers in Latin America and the Caribbean the opportunity to develop according to their full potential, we must have some serious public policy discussions about these two topics.