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Policymakers urged to increase paternity leave to increase female workforce rates

  • March 05 2021
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Policymakers urged to increase paternity leave to increase female workforce rates

By Cameron Micallef
March 05 2021

The Australian government is being urged to increase paternity leave entitlements and reform tax for family second earners to increase the labour force participation rate for women.

increase paternity leave to increase female workforce rates

Policymakers urged to increase paternity leave to increase female workforce rates

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  • March 05 2021
  • Share

The Australian government is being urged to increase paternity leave entitlements and reform tax for family second earners to increase the labour force participation rate for women.

increase paternity leave to increase female workforce rates

A recent study by Aberdeen Standard Investments has revealed that increasing paternity leave by one week would increase female labour force participation by 3 per cent.

Aberdeen Standard Investment’s senior political economist, Stephanie Kelly, said women are far more likely than men to face a trade-off between paid work and unpaid work, including caring responsibilities, and when they do work, they do fewer average hours, fuelling the inequality. 

“An employer considering two candidates of different genders may consciously or unconsciously favour the person least likely to leave. If all parents expect to take leave, these barriers to women entering and staying in the workforce should logically decline,” she said. 

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“But higher paternity leave is only part of the solution if men show reluctance to take it. Our research shows raising entitlements won’t close the gender participation divide. Policymakers and companies should consider paternity-leave policies alongside overall workforce policies – for instance, greater workplace flexibility and penalties for discrimination.”

Ms Kelly pointed out that the Australian workforce has a discrepancy between male and female participation, as well as a lot of work ahead to tackle gender inequality in the workplace. 

“There is an 11 percentage point gap in labour force participation between men and women in Australia. This is in spite of the fact that women rival and even outperform their male counterparts for average years of education, expected years of education and university enrolments,” Ms Kelly said. 

Aside from paternity rates, Ms Kelly said a system that puts a higher tax burden on second income earners is associated with lower female labour force participation. 

“This makes sense given women tend to be the second earners in dual-income households. Australia’s tax system is set up so that second earners face higher net personal average tax rates than single earners – to the tune of about 5 per cent,” Ms Kelly explained.

Policymakers urged to increase paternity leave to increase female workforce rates
increase paternity leave to increase female workforce rates
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

author image
Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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