The Smart Economics of Norway’s Parental Leave

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The Smart Economics of Norway’s Parental Leave


Category: Human Resources

An army, 40 strollers strong, grinds through the Norwegian forest. We are mamas uniformed in running tights and Technicolor tennis shoes (with a handful of papas thrown in), pushing all-terrain strollers down a hilly wooded path. This is a five mile stroller hike led by a yellow-vested guide, part of a weekly series organized by the Norwegian Trekking Association.

Enjoying nature with a sleeping babe wrapped in wool feels like a luxury. But the ultimate luxury is not having to worry about when I will go back to work, or who will take care of the baby: he will be home with either me or his papa until he is over 1-year-old. And all the while our monthly salary will be deposited into our bank account.

But is the Scandinavian model of ample paid parental leave too generous? The numbers say no, there is actually a benefit to the economy.

When I grew up in Wisconsin, “home economics” meant sewing pillows with crooked seams and baking lumpy biscuits. But Norway is a mastermind on the real implications of home economics. What the government subsidizes in parental leave and early childcare is more than offset by the increase in GDP created by mothers staying in the workforce.

Norway’s Ministry of Finance recently valued the contribution of additional working mothers to the country’s gross domestic product, and found it equivalent to the cumulative value of their pension fund since oil was discovered off the coast of Norway in the late 1960s. This is no small sum – the Norwegian oil fund is the largest sovereign wealth fund in the world, valued today at over $800 billion.

This modern take on home economics means that most mothers in Norway are working full-time. While this may mean that homemade birthday cakes suffer, the end result is a more productive society. For a small country like Norway, the participation of women in the labor force is essential. But larger countries like the U.S. should take note about women’s contributions to the economy.

Source: The Washington Post

Published: November 1, 2016