Maternity leave really does reduce future earnings

There are benefits to many things but there are costs to everything. So it is with maternity leave. Yes, of course, it’s an absolutely great idea that some time is taken off from the daily rat race on the arrival of a new child. We can, of course, argue about quite how much but what we do need to understand is that while this leave does have benefits, might well be positive overall, it does still have costs:

How does paid maternity leave affect children?

Obviously, there are benefits. The baby gets to bond and all those good things. Usually pretty decent child care too. But the costs? The leave itself is such an interruption to a working life that it lowers future wages and thus leaves the child poorer in the future.

While the availability of these benefits sparked a substantial expansion of leave-taking by new mothers, it also came with a cost. The enactment of paid leave led to shifts in labor supply and demand that decreased wages and family income among women of child-bearing age.

Note this is the effect of the maternity leave only, the effects of the existence of the child are already accounted for.

The point being not that we should abolish maternity leave. Only that it’s not an unalloyed good. Further, that making it ever longer might not be in the best interests of mother or child. We’ve already, for example, had the occasional Swedish politician pointing out that that country’s two years has a significant impact upon future employment and promotion prospects. Not positive effects either.