The change introduced from 1 July 2023 to combine the 18 weeks plus 2 weeks will provide a total of 20 weeks for a couple (or a single parent). This removes the primary carer assumption designed into the current scheme and will allow opportunity to consider the mix and potential concurrency of leave taking by the parents as well as the flexibility of use.

Deciding how the additional 6 weeks of paid leave can be allocated requires a need to consider the objectives of female labour market participation, gender equality in care and maternal and baby health, as they are balanced against each other, within the limits of 26 weeks. These trade-offs are particularly acute given the relatively small extension of total paid parental leave time from 20 to 26 weeks. The longer the total period of paid leave, the easier it will be to adequately resource and achieve all objectives of the Act.

Changes in parental leave schemes in other countries allow us to observe the impact of specific policy changes on fathers’ and mothers’ behaviours, providing ‘natural experiments’ and leading or best practices.

In the following sections we provide research evidence for key design features including reserved leave for fathers/partners in support of shared care; concurrent, shared and flexible use of paid parental leave; bonus and incentives for shared care; and support for maternal and child health.

We then offer three models, or archetypes, that highlight the way in which the competing objectives of Australia’s paid parental leave scheme might be accommodated in the next steps for policy. We complete this report with a short section on additional optimum design features from the international evidence that should be considered in this and future iterations of paid parental leave before we offer a final conclusion.

Reserved leave for fathers/partners ^[1]

Research from comparable economies demonstrates that best practice paid parental leave systems include a reserved and non-transferable (“use-it-or-lose it”) portion of paid parental leave for fathers, also sometimes called a father or daddy quota) The evidence is that when paid at, or close to full wage replacement rates, men do increase their contribution to unpaid care in the home and this, over time, changes gender norms around the division of paid and unpaid work (Patnaik, 2019).

The uptake of parental leave by fathers and partners tends to remain low because of barriers relating to the income level at which it is paid, organisational stigma and traditional gender norms (Australian Institute of Family Studies, 2019; Baxter, 2019; Coltrane et al., 2013; Kalb, 2018; Patnaik, 2019, as cited in Théboud & Halcomb, 2019). The gender pay gap poses barriers as loss of family income has less impact when women, who on average earn less than men, take parental leave (Australian Institute of Family Studies, 2019; Kalb, 2018; Moran & Koslowski, 2019;).

The highest rates of utilisation by fathers are in countries with designated periods for men that provide paid parental leave at high income replacement levels as well as incentives for fathers to take the leave, for example the Nordic countries and the Canadian province of Quebec (Feldman & Gran, 2016; Harvey & Tremblay, 2018; Karu & Tremblay, 2018).

In Australia, men have been slow to take up paid parental leave and the Dad and partner pay introduced in 2013, with most recent data showing approximately 92,000 fathers/partners taking Dad and partner pay in 2019–20 compared to 171,000 mothers taking paid parental leave (see Table 1 above). Early research showed that Australian men were less likely than women to have or to request access to parental leave, and they are more likely to be refused or penalised when they do (Chapman, Skinner & Pocock, 2014). However, as Table 4 shows, when fathers/partners do take Dad and partner pay, the vast majority take 6–10 days.

Table 4. Paid parental leave recipients by entitlement days taken

Note: Unknowns are included in 0–5 days. Only weekdays (payment days) have been considered.

Source: EDW Paid Parental Leave scheme Claims Universe, Department of Social Services.

The review by Martin et al. (2014) of the government’s paid parental leave scheme showed fathers and partners are more likely to use their annual leave to take time off to care for children. This is likely because it is paid at full wage-replacement, while Dad and partner pay is paid at the minimum wage.

However, more recent research shows that attitudes and aspirations are changing and that Australian men with children are increasingly interested in being active and engaged fathers (Baxter, 2014; Hill, Baird et al., 2019).

The greatest shift in gender behaviours occurs when fathers “father alone” (O’Brien & Wall, 2017) and take full responsibility for caring. Fathers’ involvement in childcare has been linked to improved wellbeing, happiness and commitment to family (Norman et al., 2018). Iceland provides a clear example of how policy change that includes incentives for fathers can change behaviour over the long term (see Box C). Fathers have also been found to benefit through reducing risky behaviours such as smoking and alcohol consumption (Chan et al., 2017). They report learning new skills such as prioritising, role modelling and compassion which they transfer to the workplace (Harvey & Tremblay, 2018).

When fathers take parental leave, children enjoy better relationships with them, increased father involvement over their lifetime and stronger school performance (Heymann et al., 2017; Porter, 2015). Children also benefit from higher household incomes as a result of both parents working and increased access to better health services and education experiences.

Mothers benefit when fathers/partners take parental leave around the time of birth as the mothers have more time to recuperate after childbirth, receive more emotional support and experience less stress (Chan et al., 2017; Heymann et al., 2017; Porter, 2015). When fathers/partners take parental leave, they are more likely to participate in ongoing childcare and other unpaid household responsibilities (Norman, Fagan & Elliot, 2017), allowing women with more time to spend on paid employment, facilitating greater economic independence and higher household incomes (Arnarson & Mitra, 2010). Father/partner support also leads to mothers’ smoother transition back to work and fewer experiences of child and flexibility related stigma in the workplace. Overall, father or partner involvement in childcare may provide mothers with a stronger sense of wellbeing, heightened relationship satisfaction and an enhanced ability to balance work and life commitments (Norman et al., 2018).

Parental leave can also deliver economy-wide benefits through enhanced women’s workforce participation. The 2021–22 NSW Intergenerational Report shows that if the rate of women’s participation in paid work was lifted to equal men’s, the NSW economy would be 8% larger by 2060–61 (NSW Treasury, 2021). This is the equivalent of $22,000 more annual household income in today’s dollars. Modelling the direct impact of the introduction of a 26-week paid parental leave scheme on women’s labour force participation, the Grattan Institute shows an increase in national GDP of $900 million a year, and an increase of $30,000 to the average mother’s lifetime earnings (Wood et al., 2021).

Box C. Policy changes social norms and drives gender equality: The case of Iceland

In 2000 Iceland revised their paid parental leave scheme to give each parent 13 weeks of non- transferable leave (a mother’s and father’s quota), plus an additional 13 weeks for parents to divide as they choose. Note that the leave is paid at 80% of income. This policy shift has changed fathers’ behaviour with a significant increase, since the late 1990s, in the percentage of households that share care equally (see chart below). Policy change has shifted social norms toward a dual earner–dual carer household model. Overall, the policy change has had a number of positive impacts:

• Men have increased their use of parental leave – around 90% of all fathers in Iceland took leave. On average, fathers have used their quota rights (Arnalds et al., 2022).
• Men now play a greater role in the care of their children beyond the paid parental leave period (Arnalds et al., 2013, 2022; Eydal, 2008).
• The gendered roles of both mothers and fathers are being transformed towards a dual earner–dual carer model (Arnalds, Eydal & Gíslason, 2013).
• The gender pay gap has narrowed from17.5% in 2010to 12.6% in 2020 (Arnalds et al., 2022).

Iceland: How did cohabiting and married parents divide care during the day?

Source: Arnalds, Eydal & Gíslason (2013).

Households can benefit through a shift in gender norms and through stronger parental relationships (Norman et al., 2018). The availability of paid parental leave for each parent fosters a more equal division of unpaid care and changes in traditional gender norms (Karu & Tremblay, 2018). Additionally, higher household incomes and increased economic security are associated with fathers’ use of parental leave. Children who have parents that model gender equality are more likely to carry these new norms forward (Unterhofer & Wrohlich, 2017).

There are challenges for men and partners in the uptake of parental leave, but purposeful policy design can assist in ameliorating them, and in also changing the bargain between mothers and fathers about who takes leave (Brandth & Kvande, 2020, p. 198). Gender norms which assume women do the majority of childcare may dissuade fathers from taking parental leave due to the perception that unpaid work is ‘women’s work’ (Australian Institute of Family Studies, 2019; Coltrane et al., 2013). Studies of parental leave suggest that men are more likely to use caregiving leave when there is strong organisational support and encouragement (Patnaik, 2019).

In the workplace, equal uptake of parental leave between women and men can also moderate discrimination in the hiring process by reducing employers’ reluctance to hire, retain and promote mothers (Porter, 2015) and childless women of childbearing age due to assumptions about their need to take time off for care. Finally, men’s use of parental leave contributes to future gender equality with daughters of working mothers more likely to work and to earn higher wages (McGinn et al., 2018).

When fathers and partners take parental leave, organisations report better recruitment, retention and promotion rates, leading to stronger performance and productivity outputs (Porter, 2015). Paid leave benefits send a strong signal of an organisation’s commitment to employees, and thus these benefits can help to attract and retain top talent (Rau & Williams, 2017).

^[1] Some of the material presented below is drawn from a report prepared by Marian Baird, Elizabeth Hill, Lisa Gulesserian and Daniel Dinale for the WGEA Insights Paper 2019 (WGEA, 2019).