# Paternity Leave and Why It’s Important.
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-01-04
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Economic Benefits of Paternity Leave: Breaking Stereotypes
Meta Description: Discover the economic benefits and potential impact of paternity leave on young fathers, as shared by investor Oleg Krot in TECHIIA holding's research
URL: https://financedigest.com/paternity-leave-and-why-its-importanthtml

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_By_ **_Oleg Krot,_** _an investor, the Managing Partner of the international holding TECHIIA tells about stereotypes and economic benefits of paternity leave._

In 2012, Sweden passed a [law](https://www.hsph.harvard.edu/news/hsph-in-the-news/paternity-leave-postpartum-health/) allowing fathers to take 30-day leave during the first year of a newborn baby’s life while the mother is already on maternity leave. Further research showed that women who gave birth to a child after the adoption of the document felt better than those who went on maternity leave before that. Thus, the number of hospitalizations for young mothers decreased by 14%, the prescription of antibiotics – by 11%, anti-anxiety recommendations – by 26%.

We in TECHIIA [holding were looking for a middle ground between world](https://www.financedigest.com/tennis-williams-retirement-on-hold-after-win-over-world-number-two.html "Tennis-Williams retirement on hold after win over world number two") experience and post-Soviet experience. In the countries of the former USSR, a woman could go on 3-year maternity leave, if at this time she became pregnant again, then the vacation period was doubled. For a person missing a long [time on the job](https://www.financedigest.com/britains-purplebricks-to-cut-more-than-10-of-jobs-the-times.html "Britain’s Purplebricks to cut more than 10% of jobs – The Times") market, it was almost impossible to have a painless return.

On the other hand, countries with developed [economies are not always ready to “let go” of an employee for many months](https://www.financedigest.com/uk-factories-suffer-worst-month-since-may-2020-as-economy-stumbles-pmi.html "UK factories suffer worst month since May 2020 as economy stumbles – PMI").

Although I myself have never been on paternity leave, it seems [important to me that every employee](https://www.financedigest.com/why-is-employee-reward-and-recognition-so-important.html "Why is employee reward and recognition so important?") has the opportunity to devote enough time to all aspects of his/her life. In addition to the logic of common sense and human relations, there are very specific economic benefits to this. But let’s start with concerns.

**Parental Fears of Young Fathers**

Speaking of paternity leave, I mean the still unaccustomed phenomenon of the father of a newborn baby going on vacation. [According to McKinsey](https://www.mckinsey.com/business-functions/organization/our-insights/a-fresh-look-at-paternity-leave-why-the-benefits-extend-beyond-the-personal), 90 out of 187 countries are already offering rookie dads a paid vacation. Moreover, four out of ten organizations (38%) offer longer paid [leave than their country’s](https://www.financedigest.com/new-research-reveals-the-countries-leaving-cash-behind.html "New research reveals the countries leaving cash behind") law requires. The same options are available for LGBT+ couples and adoptive parents. But less than half of men use this option.

In July 2021, Volvo Cars USA published a [study](https://www.media.volvocars.com/us/en-us/media/pressreleases/283258/volvo-cars-reveals-unspoken-workplace-stigma-for-american-dads-paternity-leave) that explains why fathers-to-be and rookie fathers take the minimum number of vacation days. It turns out that an unspoken corporate rule does not recommend that a man take [parental leave](https://www.financedigest.com/impact-com-announces-new-global-parental-leave-policy.html "impact.com announces new global parental leave policy"). More than two-thirds of American fathers surveyed admit that taking as little vacation as possible is a sign of honor.

Other important numbers are as follows:

- 90% of respondents [reported that their employer offered them paternity leave](https://www.financedigest.com/worst-flooding-since-1998-leaves-33bn-economic-toll-in-china-according-to-aon-catastrophe-report.html "Worst flooding since 1998 leaves bn economic toll in China, according to Aon catastrophe report") for less than 12 weeks, but 63% of men planned to take less than half of the allotted time;
- 62% of those surveyed admit the unwritten rule that men at [work](https://www.financedigest.com/two-in-three-people-cant-leave-their-work-emails-alone-at-home.html "Two in three people can’t leave their work emails alone at home") should not take full parental leave;
- 59% [say no one in their company takes full parental leave](https://www.financedigest.com/turkey-says-five-more-grain-ships-leave-ukrainian-ports.html "Turkey says five more grain ships leave Ukrainian ports").
- 67% feel pressured to return from parental leave as soon as possible;
- 58% fear that six [weeks of parental](https://www.financedigest.com/facebook-parent-meta-is-preparing-large-scale-layoffs-this-week-wsj.html "Facebook parent Meta is preparing large-scale layoffs this week – WSJ") leave will negatively affect their career.

“Men who take paternity leave do tend to be stigmatized and viewed as less committed employees,” words of Rebecca Glauber, professor of sociology at the University of New Hampshire as [quoted](https://www.nytimes.com/2020/04/17/parenting/paternity-leave.html) by The New York Times.

At the same time, 71% of respondents [think about changing jobs in favor of a company](https://www.financedigest.com/why-its-essential-banks-start-thinking-like-tech-companies-not-just-fintechs.html "Why it’s essential banks start thinking like tech companies – not just fintechs") that offers more loyal family conditions. 83% are convinced that parenting experience allowed them to get better and faster at work.

The parenting experience helped me as well. When the first child was several months old, I sent my wife on vacation for several weeks – she was exhausted by the complicated [birth and round-the-clock care of the baby](https://www.financedigest.com/kylie-jenner-appears-to-announce-birth-of-baby-boy.html "Kylie Jenner appears to announce birth of baby boy"). So in addition to documents, negotiations, and instructions I had diapers changing, feedings, and walks. The texts of the contracts were working perfectly as a lullaby for my daughter, however, they were putting me to sleep much faster.

It was a [period of dramatically increased](https://www.financedigest.com/polyimide-fibers-market-is-expected-to-increase-at-a-healthy-cagr-of-around-5-over-the-forecast-period-of-2021-2031.html "Polyimide Fibers Market is expected to increase at a healthy CAGR of around 5% over the forecast period of 2021-2031") workload, which made it clear that it is very important for parents to be able to find a balance.

Later, I was also taking my child for a walk from time to time, giving my wife time to rest. I liked the feeling during and after such leisure. I perfectly understand [60% of respondents](https://www.mckinsey.com/business-functions/organization/our-insights/a-fresh-look-at-paternity-leave-why-the-benefits-extend-beyond-the-personal) in the study, who state an increase in the level of happiness and satisfaction from leisure with children. These feelings carry over to work.

**Economic Component**

In addition to emotional warmth, parental leave has a tangible side. It narrows the wage gap in families by [increasing](https://www.financedigest.com/greece-to-increase-minimum-wage-again-before-election.html "Greece to increase minimum wage again, before election") the wages of mothers in the short term and helps to improve the overall financial well-being of the family in the long term.

[Research](https://www.ifau.se/globalassets/pdf/se/2010/wp10-4-The-effect-of-own-and-spousal-parental-leave-on-earnings.pdf) by The Institute for Evaluation of Labor Market and Education Policy (Sweden) found that mothers’ incomes increased by about 7% for every month a father spent at home on parental leave. Scientists monitored 9,000 [families from one year](https://www.financedigest.com/another-momentous-year-beckons-for-britains-royal-family.html "Another momentous year beckons for Britain’s royal family") before childbirth to the time when children were, on average, four years old.

Scientists from the Grattan Institute (Australia) went even further and [found](https://grattan.edu.au/report/dad-days/) that paying for maternity leave costs the state budget at least $600 million a year. However, thanks to this step, the country’s GDP is [growing by $900 million a year](https://www.financedigest.com/the-next-upcoming-years-to-see-the-gastric-electric-stimulators-market-grow-kinetically.html "The Next Upcoming Years To See The Gastric Electric Stimulators Market Grow Kinetically").

The Federal Commission of Family Affairs (Switzerland) [states](https://www.projuventute.ch/fr/fondation/actualite/conge-parental) that an increase in the number of working mothers by even 1% is enough to finance 18 to 20 weeks of paternal leave.

In Ukraine, where part of our team is located, maternity leave is traditionally provided only to mothers. This introduces some gender imbalance – after all, in the modern world, it is not necessary for a woman to sit with a child. Therefore, we at TECHIIA have gone further. Each of our employees, regardless of gender, has the opportunity to go on maternity/paternity leave for 16 weeks, retaining 100% of the salary. A longer period is [possible but without salary](https://www.financedigest.com/the-brexit-effect-hits-uk-salaries-but-possibly-boosts-tourism.html "The Brexit Effect Hits UK Salaries, but Possibly Boosts Tourism") payments.

It seems to me that in the case where there are no difficult circumstances, taking a longer vacation makes no sense. Most of our companies offer [remote work](https://www.financedigest.com/shoring-up-cyber-defences-in-the-remote-working-era.html "Shoring up cyber defences in the remote working era"), the ability to take additional days off, and sick leave – this will help all employees to correctly organize their work so that they can do everything in time and not lose their earnings.

I believe that the task of any employer is to offer an [employee maximum freedom and support](https://www.financedigest.com/how-to-manage-burnout-and-how-leaders-should-support-employee-wellbeing-tom-keya.html "How to manage burnout and how leaders should support employee wellbeing | Tom Keya") when they have a child. In return, we will get a loyal and diligent employee, and “along the way” we will [reduce the incidence rate among](https://www.financedigest.com/how-technology-is-helping-to-reduce-loneliness-among-the-elderly.html "How technology is helping to reduce loneliness among the elderly") young mothers. Good result for one small solution.

![Oleg Krot - Managing Partner of TECHIIA holding](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/oleg-krot-1736836509665-compressed.jpg)

**_Author Bio_** **_:_**

Oleg Krot – Managing Partner of [TECHIIA holding](https://techiia.com/). An investor, an innovator, an entrepreneur, an [expert in technology](https://www.financedigest.com/from-the-experts-5-payment-technology-trends-to-look-out-for-in-2016.html "FROM THE EXPERTS: 5 PAYMENT TECHNOLOGY TRENDS TO LOOK OUT FOR IN 2016") industries, and IT, an author of regular columns in Ukrainian and foreign media.

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