Women's Economic Opportunity Index - Economist Intelligence Unit

Appendix IWomen’s economic opportunityA new global index and rankingsecurity system shoulder at least part of the cash benefits during the maternity leave period reducesthe perceived cost to an organisation of hiring women of child-bearing age. In the Women’s EconomicOpportunity Index, countries were given more points for mandating a mixed financing scheme (betweenemployers and public funds) and the most points for a fully publicly financed scheme.In addition, the Index’s scoring system awards a bonus point to countries that have maternityand paternity leave schemes that cover the self-employed. The self-employed (such as businessowners and freelance workers) are often not specifically covered by parental leave agreements orlegislation. In effect, the self-employed fully finance any period of parental leave and determine itsduration. Government-funded maternity leave schemes that cover self-employed workers encourageentrepreneurship as a work option for women; thus these schemes are scored more highly in the Index.The Index does not score the value of paid leave, because there is no universal agreement on theappropriate level of wage replacement. This debate is especially strong in developing countries, wherethe size of the formal sector is small. The ILO advocates a two-thirds wage replacement rate for maternitycash benefits, but anecdotal evidence suggests that such high levels of paid leave may be a disincentive toemployers hiring women. Globally, countries have adopted a wide range of complex systems that provideunpaid, partially paid or fully paid maternity benefits. Within the OECD, some countries offer flat-ratebenefits (for example, Belgium, Germany, New Zealand, Sweden), whereas others grant different levels ofleave and payments based on industry or sector (as in Denmark and Greece). 20The Index awards one bonus point to countries that mandate paid paternity leave. Due to the alreadycomplex and multi-dimensional nature of this indicator, the Index does not take into consideration policyincentives that encourage men to take or not take their available leave, an aspect stressed by Ray et al, 21and which the Index authors acknowledge as important. Nor does the Index take into consideration theduration and compensation of paternity leave. This may be explored in detail in future editions. For now,the goal is to acknowledge the existence of paid paternity leave, as such provisions are becoming morecommon and reflect policies that support the family as a whole.20. R Ray, G Gornick and JSchmitt, Parental leave policiesin 21 countries: Assessinggenerosity and gender equality,Centre for Economic and PolicyResearch: Washington DC,September 2008.21. ibid.Further ReadingJ M Evans, “Firms’ Contribution to the Reconciliation between Work and Family Life”, Labour Market andSocial Policy Occasional Papers, No. 48, Paris: OCED, 2001.C Hein, Reconciling Work and Family Responsibilities: Practical Ideas from Global Experience,International Labour Organisation: Geneva, 2005.S L Hofferth and S C Curtin, “The Impact of Parental Leave on Maternal Return to Work after Childbirthin the United States”, Social, Employment and Migration Working Papers, No. 7, OECD: Paris, 2003. http://www.sourceoecd.org/10.1787/826588878522.J M Joesch, “Paid Leave and the Timing of Women’s Employment Before and After Birth”, Journal ofMarriage and the Family Vol. 59, No. 4 (November), 1997, pages 1008-1021.R Lalive and J Zweimüller, “Does parental leave affect fertility and return-to-work? Evidence from a truenatural experiment” (Discussion paper No. 1613), Institute for the Study of Labour: Bonn, 2005. http://ssrn.com/abstract=731766.K Morgan and K Zippel, “Paid to Care: The Origins and Effects of Care Leave Policies in Western Europe”,106 Economist Intelligence Unit 2010