Bargaining over maternity pay
The importance of maternity and childcare entitlements has been widely acknowledged by both scholars and policy-makers: evidence shows that well paid, non-transferable and flexible provisions with respect to maternity and child care-giving mitigate the “baby penalty” women face in the labour market and help in reducing gender inequalities both in the household and at the workplace. Many OECD countries have embarked on a number of changes of parental leave policies in the last decades, particularly in Europe, under the homogenizing pressure of the European Union. Yet, and despite these legislative changes, the generosity of parental leave entitlements varies significantly across countries. Especially in those countries where legal entitlements are relatively ungenerous, like the UK, where employers across and within sectors often provide better conditions. How are maternity provisions decided in high skills sectors? In our new JPP paper, we use a bargaining framework to explain maternity leave generosity in one particular sector where data are available, namely the Higher Education sector in the UK.
We analyse 214 maternity schemes across 165 Higher Education Institutions (HEIs) in the UK. Most UK universities provide extra Occupational Maternity Pay (OMP) that tops up the SMP (Statutory Maternity Pay) in the first 39 weeks of maternity leave. Eligibility for OMP usually depends on the length of service, and both the payments and the eligibility criteria vary among institutions. Table 1 depicts the huge variation in maternity pay across HEIs. While many universities only grant 4 weeks of paid leave, the number of weeks for which full salary replacement is granted to women on maternity leave varies from 0 – or just statutory maternity pay (e.g. Leeds Metropolitan University) to 26 weeks (e.g. Manchester University). Places as diverse as Bristol, Kent or Goldsmith College only grant 8 weeks of fully paid maternity leave compared to the 18 weeks of full salary replacements provided by Keele University or Cambridge University.
Table 1: Number of weeks of full salary replacement across British HEIs
|Weeks full salary replacement||Number of packages||Percent|
To understand this significant variation in maternity provisions across UK universities, we turn to a bargaining model. In a bargaining framework, firstly, factors that raise the bargaining power of female employees, especially academic women, increase maternity benefits. Secondly, factors that increase the cost of providing maternity benefits reduce the generosity of maternity provisions. Finally, factors that increase the institution’s incentives to retain mothers in the workforce also increase the generosity of maternity pay. As a result, our theory predicts that universities with higher shares of unionised employees, those with a larger proportion of female professors and female academics at childbearing age, and universities that put greater emphasis on research offer better maternity provisions. In contrast, universities with higher student-to-staff and admin-to-academic ratios grant less generous policies. According to our model, universities’ income plays a very limited role in explaining the generosity of maternity policies.
This framework performs very well in the data. Our results show that universities’ income has little effect on maternity generosity. Structural factors and the strategic goals pursued by the universities do. Institutions with a high student-to-staff ratio offer less generous provisions while research-oriented institutions grant more generous policies. The bargaining power of female academics is mainly strengthened by both the share of female professors in place when decisions are made and the share of female academics at childbearing age. The number of female academics at child bearing age increases the probability that the university loses many talented and productive women if maternity provisions are sparse. We also show that the same logic is not at stake for female administrators. Neither the share of female senior managers nor female administrators at child bearing age, have an effect on maternity provisions. Interestingly, the level of unionisation has no effect on the generosity of maternity pay. This might be due to the fact that unions have many constituencies, which are not all concerned with maternity policies.
Figure 1 depicts one of our main results. The graph displays the predicted generosity of maternity leave as a function of university research intensity (x-axis) and the student-to- staff ratio (black and grey lines). We can see that as research intensity increases, universities tend to provide for more generous packages. Highly research intense institutions have a vested interest in retaining productive mothers throughout their employment at the university. Better maternity provisions are very likely to be used in these cases as a means to keep mothers productive and satisfied with their work environment, thus allowing them to invest in research activities. However, as the bargaining framework predicts, the effect is much more pronounced for institutions with a lower student-to-staff ratio since these universities find it easier to make arrangements to cover for women taking maternity leaves.
Figure 1: The determinants of generous maternity benefits
To summarise, our work highlights the institutional-based constraints and incentives offered to women in the UK’s academic sector. By unpacking the determinants of generous maternity benefits, our research can be seen as a first step in better understanding the consequences of this HR policy for high skilled sectors, both at aggregate and individual levels.
– Vera E. Troeger, University of Warwick and CAGE
– Mariaelisa Epifanio, University of Liverpool and CAGE