Use of Parental Benefits by Family Income in Canada: Two Policy Changes

• Published date: 01 April 2019
• Date: 01 April 2019
• DOI: http://doi.org/10.1111/jomf.12542

R M, F H, M H,  A H University of Western

Ontario

Use of Parental Benets by Family Income in

Canada: Two Policy Changes

Objective: This article examines how two recent

policy extensions affected the use and sharing

of parental benets in Canada and how this

differed by family income.

Background: Paid parental benets positively

affect economic and health outcomes. However,

not all policy changes increase leave-taking,

especially among low-income families.

Method: Drawing on administrative data from

1998 to 2012, we estimate linear probability

models to examine the likelihood of either par-

ent using parental benets and multinomial logit

models to examine patterns in sharing benets.

Westratify models by household income to exam-

ine how the two policy changes affected families

differently across the income spectrum.

Results: Both policies increased use more

among low-income families than those

with higher incomes, which is likely due

to widening eligibility criteria that affected

low-income families disproportionately. Sec-

ond, policy design induced different patterns

of sharing benets in response to the two policy

Department of Sociology, Universityof Western Ontario,

Social Science Centre #5326, London, Ontario N6A 5C2,

Canada (rachel.margolis@uwo.ca).

© 2018 The Authors. Journal of Marriage and Familypub-

lished by WileyPeriodicals, Inc. on behalf of National Coun-

cil on Family Relations.

This is an open access article under the terms of the Creative

Commons Attribution License, which permits use, distribu-

tion and reproduction in any medium, provided the original

work is properly cited.

Key Words: Canada, family, parental leave, policy, work–

family issues.

changes. In contrast to the 2001 policy that

only moderately increased sharing of parental

benets, Quebec’s 2006 program explicitly pro-

moted gender equality and increased sharing

of benets across all income groups, but three

times as much for middle- and high-income

families than low-income families.

Conclusion: We conclude that policy design

shapes socioeconomic inequality in newborns’

early life parental context.

B

Extended maternity or parental benets policies

allow new parents to stay home with their infants

with legal job protection and nancial support

(Baird & O’Brien, 2015). These policies aim to

foster attachment between parents and infants

during a critical bonding period (Ainsworth,

1979) and improve parental and child outcomes

by allowing parents to build family relation-

ships and reduce work–family conict during a

stressful period (Glass & Estes, 1997; Repetti,

Wang, & Saxbe, 2009). As hypothesized, paid

maternity and parental benets have been

shown to have a variety of positive economic

and health benets such as increasing labor

force attachment among new mothers (Berger &

Waldfogel,2004; Rossin-Slater, Ruhm, & Wald-

fogel, 2013), improving employee morale, and

reducing employer costs by improving worker

retention (Gault, Hartmann, Hegewisch, Milli,

& Reichlin, 2014). Child health is improved

through increased rates and duration of

breastfeeding (Berger, Hill, & Waldfogel, 2005;

Hawkins, Grifths, Dezateux, & Law, 2007;

450 Journal of Marriage and Family 81 (April 2019): 450–467

DOI:10.1111/jomf.12542

Use and Sharing of Parental Benets in Canada 451

Mirkovic, Perrine, & Scanlon, 2016; Visness

& Kennedy, 1997), improved vaccination rates

and more frequent well-baby checkups (Berger

et al., 2005; Heymann, Raub, & Earle, 2011).

Leave for mothers can help prevent maternal

depression and stress, which is important for the

quality of care she provides to her infant (Chat-

terji & Markowitz, 2012; Chatterji, Markowitz,

& Brooks-Gunn, 2013), and leave for fathers

can promote their involvement in child care and

relationships with children (Haas & Hwang,

2008; Huerta et al., 2013; Klerman, Daley, &

Pozniak, 2013). However, although some policy

extensions have been shown to increase the use

of parental leave, not all policies increase use, or

only increase use among more advantaged sub-

groups (Ekberg, Eriksson, & Friebel, 2013; Han

& Waldfogel, 2003; Ray, Gornick, & Schmitt,

2010).

The ways in which paid parental benets

policies affect changes in use and sharing of

benets, and among which groups, depend on

the policy’s design (Hegewisch & Gornick,

2011; Ray et al., 2010). Policies tend to increase

use the most if benets are paid at a high

replacement rate, stigma and sanctions associ-

ated with the receipt of the benets are low, and

if eligibility criteria are fairly wide (Ray et al.,

2010). Families with low incomes or education

tend to use parental benets more if policies

offer a high earnings replacement rate and are

designed to accommodate a wide variety of

nonstandard employment rather than long-term

steady work at high wages (Blum, Koslowski,

& Moss, 2017). Policies that encourage the

sharing of benets between both parents tend

to be those that offer nontransferable leave for

fathers and offer high earnings replacement

(Ray et al., 2010), and middle- and high-income

families often share parental benets more

often than low-income families (Han, Ruhm, &

Waldfogel, 2009; Han & Waldfogel, 2003). It is

important to examine the heterogeneous effects

of parental benets policies by family income

because the design of these policies can lead to

very different patterns of use, unequally shaping

the family dynamics of early parenthood.

In this article, we examine how two recent

policy extensions affected the use and sharing

of parental benets within families with new-

borns in Canada. The Canadian context is an

interesting and important one to consider for

those concerned about paid parental benets

policies because the level of benets offered

is generous when compared with its southern

neighbor the United States, but in the low to mid-

dle range when compared with what is available

in most European countries. In addition, only the

province of Quebec offers (since 2006) parental

leave time specied for fathers, and this is being

considered in Canada’s 2018 federal budget.

The rst policy change (2001) was federal and

affected all of Canada, and the second (2006)

affected only the province of Quebec. Our anal-

ysis makes two main contributions. First, our

robust study design examines the effects of the

policy changes, net of time trends and shifts in

the distributions of other population characteris-

tics. Second, our use of new administrative data

allows us to examine the heterogeneous effects

of these two policies by family income. Our nd-

ings highlight how these two policy extensions

increased use more among low-income fami-

lies than those with higher incomes and that

this is likely due to widening eligibility criteria

that affected low-income families disproportion-

ately. This can be contrasted with the Family

Medical Leave Act in the United States, which

only increased use among more-educated moth-

ers (Han et al., 2009). Second, our ndings point

to the ways in which policy design induced dif-

ferent patterns of sharing benets in response to

the two different Canadian policy changes. Pol-

icy design shapes socioeconomic inequality in

newborns’ early life parental context.

Policy Factors Associated With the Use

and Sharing of Parental Leave

Some design features of parental benets poli-

cies might be expected to increase use equally

across subpopulations, such as creating universal

eligibility criteria. However, other factors might

increase use for one or both parents more among

very advantaged families and enhance stratica-

tion in the receipt of job-protected paid parental

benets. Eligibility criteria, the length of time

to be shared between parents, nontransferable

leave for each parent, the degree of earnings

replacement, and income ceilings all might have

differential effects on use of benets by family

income. We examine these ve key design fea-

tures of parental benets policies that have been

shown to affect patterns of leave-taking among

new parents and examine how they might affect

families differently by income level.

First, policies that widen eligibility criteria

are associated with higher rates of leave-taking