Stacie BeckEleanor Craig

President John F. Kennedy called children the world’s most valuable resource. They become our future workers, leaders, caregivers and ... taxpayers.

The benefits of children flow to everyone, parents and nonparents, but the cost of raising them falls heavily on parents. The U.S. Department of Agriculture estimates the direct costs at $200,000 over 18 years, not including education, child care or the loss of income of a stay-at-home parent. When those are added, total cost easily doubles.

Working parents have few resources to call on, since many do not qualify for the myriad of benefit programs aimed at low income, non-working parents.

One way to help is to provide paid maternity leave for the birth of a child to offset the mother’s loss of income.

Right now, a woman can take up to 12 weeks of unpaid leave if her workplace employs at least 50 workers. However, many parents-to-be cannot afford this income loss.

Nearly all countries other than the U.S. have government programs or policies to provide or encourage paid maternity leave. They vary greatly. Paid leave can range from six weeks to a year or more. Some programs replace 100 percent of average wage, some replace 67 percent of average wage, some provide minimum wage or a flat payment. Payouts are usually capped. Some programs limit the number of leaves, some require citizenship status and some allow leave to be shared with the father. Nearly all require a minimum employment history and many require a minimum contribution history to a social insurance program.

Who should pay? An important principle of taxation is that those who enjoy the benefits should be the ones that bear the tax. Since the benefits of children flow to all who depend on future workers and taxpayers, the tax should be broad-based as well. That is why the majority of programs are financed by the government through general revenues or the social security system (International Labor Organization, 2014). Benefits can be paid directly or through reimbursements to employers. Both plans have been put forth, one by Rep. Rosa L. DeLauro, D-Conn., which would be run by the Social Security Administration, the other by Sen. Deb. Fischer, R-Neb., which allows employers to take tax credits to offset the cost of paid maternity leave.

Either program is preferable to one that requires that employers pay for maternity leaves. To impose such a requirement creates an incentive for employers to avoid hiring women who are likely to use it, and leads them to discourage women from taking it (International Labor Organization, 2014).

It is important to avoid repeating one of the worst errors of the Affordable Care Act, which was to pass higher health insurance costs to employers of full-time workers, rather than providing tax credits or vouchers directly to workers. Because of it, employers now have strong incentives to eliminate full-time positions and replace them with part-time positions or with none at all. This contributes to the stagnation of the job market and wages that seems to so mystify our public officials in Washington. A maternity-leave program can be designed to avoid making this problem worse.

Fertility rates are dropping in the U.S. and around the world, even more so during the recent economic recession. Because they realize the implications for future economic growth, future tax revenue and the fate of pay-as-you-go social security plans, governments in Europe and elsewhere implemented programs aimed at reversing the trend of declining fertility.

That may be reason enough for the U.S. to start a program for paid maternity leave, but it is at least as important to create an economy that makes it possible for hard-working young people to achieve their dreams. For many, that is to start a family.

Paid maternity leave can help.

Stacie Beck and Eleanor Craig are associate professors of the University of Delaware’s Economic Department.