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New Study Shows Longer Parental Leave Would Increase The US Workforce

human resources

Parental leave has a major influence on workplace culture and the workforce as a whole. Having a baby is a massive life change. And it’s hard to think of any other situation – other than retirement – that takes people OUT of the workforce more.

Many professionals decide to leave their jobs and become stay-at-home-parents. Others who plan on having a baby soon often switch jobs to a different company that has more generous maternity/paternity benefits.

A new study now shows that it would be better for organizations – and the workforce as a whole – if we all offered significantly longer parental leave. And we have Canada to thank as a reference.

From this Inc. article and a new research paper released by the Federal Reserve Bank of San Francisco:

If U.S. businesses offered extensive parental leave policies, the nation could see up to 5 million additional workers join the labor force.

5 MILLION! So what is driving this finding? Here are a few of the key statistics and takeaways:

  • There is an 8 percentage point gap between women’s labor participation rates in the U.S. and Canada, a discrepancy the researchers said is linked to the two countries’ parental leave policies. The gap in the men’s rate was 2.5 percentage points.
  • “Parental leave policies in Canada provide strong incentives to remain attached to the labor force following the arrival of a new child,” as Canadian employees have job protection and continue to accrue wages and benefits while on leave
  • A Canadian parent on leave maintains a continuous employment relationship, and this protection can last for up to 78 weeks in combination with existing maternal leave

And here’s the big final takeaway:

“A large pool of skilled potential workers could be encouraged to join the labor market with the right set of policies,” the paper’s authors wrote, adding that three-quarters of the discrepancy between the participation rates in the Canadian and American labor market can be attributed to the attachment of women to the workforce.

So I’m curious how you feel about this. Would longer parental leave potentially influence you to stay with your current employer and in the workforce?