Parental leave pay and paid maternity leave: should entitlement be tied?

Abstract

This paper provides an insight into the earnings and household income of mothers who would be affected by recently proposed reforms to Parental Leave Pay (PLP) - formerly Paid Parental Leave - that would tie PLP entitlement to access to paid maternity leave (PML) workplace conditions. The Household, Income and Labour Dynamics in Australia Survey data used in this paper support previous research on access to PML that finds that mothers with higher earnings are those more likely to have PML entitlements. It contributes to this literature by showing that these mothers also tend to be in higher-income households. As a consequence, low-income households make up a relatively small proportion of those likely to be affected by the PLP reforms that have been proposed. The paper concludes with discussion of some of the design elements of current and proposed PLP policy. It argues that, although there is scope to better target PLP expenditure, reforms that tie PLP entitlement to PML workplace conditions may not be the best way to go about this.