Maternity and Paternity Leave

Introduction

In early June a column of fathers with prams is due to assemble outside the Department for Business and Trade, demanding what campaigners call “a fair deal for fatherhood”. Statutory paternity leave in the United Kingdom is capped at two weeks, paid at just £187.18 a week, and entirely unavailable to the self-employed. 

What does the chart show?

A comparison of full-rate-equivalent (FRE) paid leave, weeks of leave adjusted for the proportion of salary actually replaced, sets Britain’s offer in stark relief. On the horizontal axis lie the weeks of fully-paid leave available to mothers; on the vertical, the same measure for fathers. Each point represents an OECD member. Countries that have achieved rough gender parity sit near the 45-degree diagonal; those that privilege mothers appear below it.

The United Kingdom is lodged in the bottom: roughly 12 FRE weeks for mothers, 0.4 FRE weeks for fathers. Spain, which equalised paid leave in 2021, rests on the parity line, 16 weeks each at full pay. South Korea and Japan occupy different terrain again: both provide extraordinarily long nominal entitlements to fathers, yet effective pay rates and workplace culture lead to very different take-up patterns.

Why is the chart interesting?

British mothers enjoy one of the longest statutory leave periods in Europe, up to 52 weeks away from work, 39 of them paid. But after the first six weeks at 90 per cent of salary, Statutory Maternity Pay falls to a flat £187.18. Adjusted for that low wage-replacement, the average British mother receives the equivalent of about twelve fully-paid weeks.

For fathers the picture is bleaker. Two statutory weeks, paid at the same flat rate, amount to less than half the minimum wage. Research by the Fatherhood Institute shows that an average full-time father forgoes more than £1,000 of net income if he uses the entitlement in full. Unsurprisingly, barely one in three fathers claimed statutory paternity pay last year.

Shared Parental Leave, introduced in 2015, was intended to redress the imbalance by allowing mothers to transfer up to 50 weeks of their entitlement to a partner. Yet because SPL is paid at the same flat rate, and requires the mother to curtail her own leave first, take-up has languished between two and eight per cent of eligible couples. The incentives speak for themselves: for most households the mother already earns less, is physically recovering from childbirth and is offered more generous pay; the father earns more and would endure a steep salary reduction by taking extended leave. Rational families allocate paid work accordingly.

The economic consequences are well documented. The Institute for Fiscal Studies estimates that the gender pay gap widens consistently in the decade after a first child is born. The Centre for Progressive Policy calculates that under-employment of mothers costs the UK economy some £23 billion a year in lost output. In short, the structure of Britain’s leave system encourages precisely the outcome now regarded as a drag on growth.

Spain embarked on a very different journey in 2019, when it began phasing in equal, non-transferable leave for each parent. Since January 2021 every mother and every father is entitled to 16 weeks at 100 per cent of prior earnings, funded through social security. Six weeks are compulsory for each parent and must be taken immediately after birth; the remainder can be used flexibly during the baby’s first year.

The result is a textbook demonstration of policy-induced behaviour change. By 2023 virtually all eligible fathers (98 per cent) claimed the benefit, up from fewer than 60 per cent when paternity leave was a fortnight. Early wage-gap estimates suggest the reform has already shaved two percentage points off the pay differential in the first post-natal year.

Spain’s approach validates two design principles. First, income replacement matters. At full pay the opportunity cost of leave is low enough for fathers to participate. Second, use-it-or-lose-it quotas work. As neither parent can transfer unused weeks, both have a strong incentive to claim them.

Japan operates the world’s theoretically longest paid parental leave. Each parent may take up to 52 weeks of childcare leave, paid at 67 per cent of salary for the first six months and 50 per cent thereafter, with a ceiling that spares only the highest earners. In October 2022, a new four-week paternity leave was added, that fathers can take within eight weeks of birth, also paid at 67 per cent.

The legal framework is, on paper, more generous for fathers than anything in Europe. Uptake statistics tell a subtler story. In 2023 a record 30 per cent of new fathers took some form of leave, double the figure only four years earlier, but almost two-thirds of those fathers were off work for fewer than 30 days. The availability of lengthy leave has collided with Japan’s famously demanding work culture and the expectation that career tracks run uninterrupted. Large corporations are starting to publish their own male-leave rates, and government targets aim for 50 per cent male participation, but the gap between statute and practice remains wide.

Like Japan, South Korea offers each parent up to 12 months of parental leave, but it adds two notable twists. First, the benefit is set at 80 per cent of prior earnings yet capped at roughly £950 a month, around 40 per cent of average full-time pay. Second, the state sweetens the deal if both parents claim leave within the child’s first year: each receives 100 per cent of salary for the first three months, subject to a higher cap, and a quarter of the total benefit is paid as a “return-to-work” bonus once the parent has been back in post for six months.

Those incentives appear to be working. In 2022, 131,000 Korean employees used parental leave; three in ten were men, up from just nine per cent in 2016. Most fathers still take shorter breaks than mothers, but the direction of travel is clear.

Because the ceiling cuts in at a relatively low level, the average effective replacement for parental leave is only about 39 per cent of previous earnings, barely higher than the UK’s. Raising that cap, or enhancing the period at full pay, may be necessary if the government wishes to achieve parity in usage.

Britain’s chart position represents an economic inefficiency. By concentrating leave on mothers and compensating it poorly, the UK nudges women out of the labour market at the very point their skills and experience peak, while denying fathers the opportunity to share early childcare. Spain shows that equal, well-paid and non-transferable leave can transform uptake in a single parliamentary term. Japan and Korea reveal the limits of generosity that is constrained by caps or undermined by workplace culture however all three reinforce the principle that incentives matter.

When fathers protest this June, they will be highlighting an under-used lever of economic policy, one capable, if redesigned, of narrowing the gender pay gap, lifting participation and improving long-term growth.