Laila Latif, MSc Comparative Public Policy, University of Edinburgh
August 2022 marked the deadline of a 3-year window given to EU Member States to implement the Work-life Balance Directive into national law. This Directive aims at providing a strong foundation for parents and carers to “reconcile their professional and personal lives.” Despite this progress, there is still room for improvement in order to simultaneously support the future of women and the European labor force.
The optimal length of a maternity leave, and parental leaves overall, have been a persistent theme in many policy discussions. There are multiple factors at play: maternal recovery, child development, and labor force implications to name a few. The future of the labor force is overwhelmingly dependent on women, both through their own engagement and future contributions through children; therefore, leave policies need to be made more all-encompassing and favorable.
EU Work-life Balance Directive
Directive 2019/1158 is working to combat a longstanding challenge in both EU Member States, and globally: that of a fair and universal parental leave policy. Previously, EU Member States faced notable variation in their leave policies: ranging from 6 weeks of maternity leave in Portugal to 42 weeks in Ireland.
In terms of the Directive’s leave policies: under previous Directive 92/85, women have the right to a minimum of 14 weeks paid maternity leave, with two of them being mandatory. Under the new Directive 2019/1158, an additional paternity leave of at least 10 paid working days is introduced. The compensation level for these leaves is decided by respective Member States at their national sick pay levels.
Labor Force Implications
As of 2021, the employment rate of women remains 10 percentage points below men in the EU. However, the establishment of a paternity leave through Directive 2019/1158 follows evidence that active use of paternal leave and assistance creates the space for “a more gender-equitable division of labor,” and helps to minimize this divide.
In the wake of the COVID-19 pandemic, women’s internal and societal dilemma in having either a career or children has been heightened. Caring responsibilities accounted for nearly 20% of inactive women, compared to less than 2% of their male counterparts in the EU. A recent study reveals that women have faced an increase in their care responsibilities and work-life balance conflicts post-pandemic. Thus, the labor force discrepancy is continuing, with more women than men reducing their hours and taking additional leave.
Regarding a broader labor force context, the EU is facing ageing populations and falling fertility rates across the board. Currently, the median age in EU Member States is expected to increase 4.5 years by 2050. The long-term economic costs of this compound challenge will be observed through exacerbated pressure in welfare states, since the working population is expected to finance the pensions of the retired. Part of this pressure to increase the fertility rate, and thus improve the EU’s economic outlook, predominantly falls on women. However, lack of adequate support, minimized maternity leave, and the threat of career decline, all serve to support the opposite.
The Directive’s Shortcomings
The Directive does solidify a proper foundation in EU family leave policy; however, there are areas where the policy could be strengthened. While the Directive does introduce a mandatory paternity leave, it is undoubtedly modest at 10 working days. In addition, the compensation level that parents receive during their leaves is determined by the national sick pay level. The pay factor of a leave is a very subjective consideration in whether parents will choose to have children, as fixed compensation levels will have different relative effects based on the income of receiving families. In many cases, it seems likely that the compensation may not justify a leave from work.
Furthermore, these EU policies do not consider another large factor in family decisions: childcare. While all EU countries provide some semblance of assistance to parents who face childcare costs, there is notable inconsistency between countries. Net childcare fees equate to more than 25% of median female earnings in Cyprus and Ireland, compared to nearly no net costs in Germany. Several countries have found that parents cannot afford to work due to the loss in disposable income from maintaining childcare during those hours.
Overall, the Directive is successful in setting a proper baseline for expansion in terms of maternal recovery, childcare support, and further paternal leave. However, there are additional arguments that the Directive needs to be re-evaluated entirely in the wake of the pandemic and its repercussions for women. All of which needs to be viewed in consideration of women’s impact in the labor force, both participating in it and continuing it through future generations. In order to simultaneously encourage workforce engagement and childbearing, policymakers need to make the prospect of having children more appealing for working women.