The economics of maternity leave

Published: April 3, 2017 3:04 AM

With women comprising almost 50% of Indian population, it is obvious that gender equality and economic development go hand in hand.

Maternity Benefit Bill, maternity leave, Parliament, Indian population, working women, working women in India, unorganised sector, IT sector, MNC, women in IT companiesWith women comprising almost 50% of Indian population, it is obvious that gender equality and economic development go hand in hand.

V Chandra

Parliament has cleared the Maternity Benefit (Amendment) Bill, raising paid maternity leave from 12 to 26 weeks. Last week, it got the Presidential assent too. To what extent and in what ways will this landmark step bridge the gender gap? As researchers and analysts deliberate on the much-talked of initiative, for the urban working class it raised hopes and aspirations in some, and apprehensions and concerns among others.

With women comprising almost 50% of Indian population, it is obvious that gender equality and economic development go hand in hand. The women index of employability has traditionally been low. Societal and cultural norms in India are still gender-specific, with most women’s contribution going into the unaccounted national income (over 90% of working women earn their living in the unorganised sector). Working conditions and employee contracts are loosely drafted and often unstructured. There is also no uniformity in laws related to maternity benefits, which adds to the ambiguity. For many, pregnancy means giving up job, taking a break, and moving on with available opportunities. With the added 14 weeks maternity leave falling directly on the employers, thoughts of distancing them at the hiring stage itself may not be really far behind.

Moreover, the law will benefit only about 18 lakh women who are in the formal sector—about 90% of the female workforce is in the unorganised sector. Therefore, the 26-month paid maternity leave will only help bridge the gender gap in corporate India. So, for working would-be mothers in the formal sector, it is a welcome move. In fact, ample literature exists in favour of a 24-week leave for the overall well-being of women employees and the newborn. Equally abundant evidence exists on how it does not impact business negatively. Rather, it acts as a retention tool and enhances employee engagement and thus contributes positively to productivity.

A good number of Indian companies as well as MNCs have embraced this extended maternity leave policy with open arms. A significant chunk of our educated youth enter the IT sector. These knowledge hubs are at the forefront in emerging work practices—there is a preponderance of gender balance and concerns about family responsibilities. While it is not always possible to have the same policies across all sectors, progressive employers have introduced a number of facilities and benefits to create employee-friendly workplaces.

A point of concern, however, is that the drop-out ratio among women employees has gone up in some sectors despite the very many employee-friendly policies. Balancing career goals with care-giving roles has been a tightrope walk for many young parents. Often, it is the women who compromise. While some settle for less demanding role within the same organisation, others shift jobs, moving to presumed cooler professions like ‘teaching’. Many organisations, especially those in the white goods sector, have employee-friendly policies like flexi-time, time banking, teleworking, working from home, etc, but these come with unquantifiable hidden costs. The unwritten code, perhaps unintended, swings in favour of those who have not availed these special benefits. The role of managers, especially immediate supervisors, in realising what already exists needs to receive more attention than it did thus far. Integrating gender equality concerns into employment promotions should be addressed.

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Bridging the gender gap in terms of sheer numbers alone is not sufficient. For true integration and inclusiveness at all levels, there needs to be an attitudinal shift and a reorientation of these policies at the implementation level. It’s time we do away with typical questions at the hiring desk—‘When do you plan to settle down?’ or ‘How many kids do you have?’—to gauge commitment levels.

The author is professor, IMI-New Delhi. Views are personal

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