The Business Case for Paternity Leave

In an unpredictable job market, spouses do better when they "cross-train" at home.

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What’s not to love about paternity leave? It helps a man to bond with his new-born, to strengthen his marriage, and catch up on sleep. So we’re left to wonder why the United States is a world laggard in offering paid leave to either a new mother or father.

Only 15 percent of American companies currently offer paid paternity leave, suggesting that our businesses see time off for new dads as a paid vacation with few beneficial consequences. Those who advocate for paternity leave resort to various kinds of appeals. Some invoke feminist values, noting that paternity leave encourages dads to share the workload at home. Others point out that men who take paternity lacontinue to be highly involved as their children grow older. In one study, University of Michigan researcher Norma Radin found that three-to-six year old sons of highly involved fathers ranked higher on tests of verbal intelligence. U.C. Berkeley psychologists Carolyn and Phil Cowan found that children with involved dads were better at classifying objects and placing things in logical order. And according to a study by psychologist Abraham Sagi, Israeli kids of attentive fathers showed more highly developed empathy. These effects last: In one study, children of highly involved fathers were still more self-directed than other kids 20 years later. And such sons grow to became better fathers themselves.

But in all of these discussions, we’ve forgotten—or given up on—the appeal to business. In fact, there’s something in it for the bottom line. Paternity leave enables families to survive in an increasingly unpredictable economy. It’s hard to know whose salary—his or hers—will be higher, and paternity leave helps parents become more domestically interchangeable. Just as companies “cross-train” workers to meet shifting market demands, so spouses need to cross-train at home.

Consider the World Economic Forum’s annual Global Competitiveness Report for 2013, which evalued the nations of the world on their “business climate,” taking into consideration all the factors that determine a nation’s level of productivity. The U.S. ranked Number 5. Two countries that ranked ahead of it—Singapore (2nd) and Finland (3rd)—both offer paid paternity leave.

A new dad in Singapore gets at least one week of paternity leave (the equivalent of $1,973 U.S.) and can also use one of his wife’s 16 paid weeks off. A new father in Finland receives three weeks of paid leave as well as a paid “Daddy Month,” which he can take any time up until his child’s eighth birthday. If he needs help caring for his child, he can drop by his local “family center” for peer support and expert advice. For each new child, parents receive a “baby box” containing a tiny snowsuit, a pacifier, mittens, socks, environmentally friendly reusable diapers—and a package of condoms.

Finland is often cited for the superb education of its youth. In the Program for International Student Assessment, administered every three years and last reported in 2010, Finland placed 2nd out of 65 countries in science (the U.S. placed 23rd). Finland placed 3rd in reading (the U.S. placed 17th), and 6th in math (the U.S. came in 31st). Surely part of the credit goes to its fine and highly honored teachers.

But why are those Finnish kids so ready for school? And why, as workers, are they so high on creativity? With 67% of Finnish women in paid work—and with one of the highest fertility rates in Europe and Europe’s lowest rates of child poverty (12%)—you have to wonder what Finland’s got that we don’t. Maybe what it’s got is the resolve to make a shrewd business decision to exploit a precious and oddly hidden natural resource—and invest in paternity leave.