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Mothers not paying high price

By Stephen Lacey

According to a recent study, women who take paid maternity leave don't suffer long-term salary loss.

Dr Barbara Hanel, from the University of Melbourne's faculty of business and economics, investigated the extent to which employer-provided paid maternity leave schemes prolonged a mother's absence from work, and if their earning capacity was then affected.

Dr Hanel's work, published in the Melbourne Institute of Applied Economic and Social Research, determined the impact was negligible. "There is virtually zero impact on long-term employment or wages after the child's first birthday," she says.

Under the federal government's Paid Parental Leave Scheme, new parents are eligible to receive the minimum wage for up to 18 weeks. Before the introduction of the federal scheme, about 38 per cent of all female employees were covered by an employer-provided paid maternity leave policy, which offered up to 18 weeks off work.

Dr Hanel found that mothers not eligible for the employer-provided leave were almost twice as likely to return to work before the child was six months old, while those mothers with employer-provided entitlements usually returned to work when their child was aged between six months and two years. The research found that paid maternity leave cheaply achieved its goal of enabling mothers to spend time with their children.

"Short, paid maternity leave costs little and has virtually zero long-term costs in terms of mothers' labour-market position," she says.

Published: 22 September 2012

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