2 ms·

I think the issue isn't that someone may be forced to take the leave when they don't, rather there are hidden incentives for them to not do so when they do. The

I think the issue isn't that someone may be forced to take the leave when they don't, rather there are hidden incentives for them to not do so when they do. There's a heck of a lot of room between the latter and the former. On another note we are seeing fertility levels fall in many countries to the point where it's becoming an economic hazard. Parental leave thus becomes a social good. A smart market friendly solution, that would also be a win for families, would be to do more in terms of culture to encourage fathers to do this. In Japan, I've noticed high ranking male ministers almost uniformly taking parental leave to set an example to emulate. I'll add that such an initiative should still leave freedom for people to make their own choices for their own circumstances.

tomp 6y ago
Nudging parental/father's leave in order to increase fertility levels seems like a drop in the bucket... Why not tackle the real issues? Pay people more, tax them less (lower income taxes, increase capital taxes), make property cheaper. Yeah that includes a good parental leave pay (possibly more than 100%, in order to specifically encourage fertility in highly educated women/couples). That will have 100x greater effect in terms of fertility, in addition to being a "social good" in other regards.
- andrewjl 6y ago
  All those things you listed involve difficult trade-offs. Increased capital taxes would on the margin decrease capital expenditures, and thereby hurt income growth in long-term due to lack of productivity gains. That's the last thing we'd want if our goal was to increase income. IMHO both income and capital gains taxes should be cut substantially. Cheaper property necessitates more property, and at least here in US not building in the suburbs has become presidential campaign fodder. The most economically productive cities like SF have some of the most complex zoning and planning regulations that make boosting supply challenging. If I had to guess what the right answer would be, it'd be higher minimum wages + stronger unemployment benefits that are designed to get folks back to work. Germany's post-Hartz system is an example of the latter. Higher minimum wages would force people out of work, but they would also motivate higher cap-ex in automation. Higher labor costs would make certain overly expensive automation projects more tractable to corporate management. The unemployed would get an opportunity to retrain for better, higher paying jobs and do so while having basic needs met. You can probably see though how this solution is basically impossible in the current political climate.

tomp 6y ago

Nudging parental/father's leave in order to increase fertility levels seems like a drop in the bucket... Why not tackle the real issues? Pay people more, tax them less (lower income taxes, increase capital taxes), make property cheaper. Yeah that includes a good parental leave pay (possibly more than 100%, in order to specifically encourage fertility in highly educated women/couples). That will have 100x greater effect in terms of fertility, in addition to being a "social good" in other regards.

andrewjl 6y ago
All those things you listed involve difficult trade-offs. Increased capital taxes would on the margin decrease capital expenditures, and thereby hurt income growth in long-term due to lack of productivity gains. That's the last thing we'd want if our goal was to increase income. IMHO both income and capital gains taxes should be cut substantially. Cheaper property necessitates more property, and at least here in US not building in the suburbs has become presidential campaign fodder. The most economically productive cities like SF have some of the most complex zoning and planning regulations that make boosting supply challenging. If I had to guess what the right answer would be, it'd be higher minimum wages + stronger unemployment benefits that are designed to get folks back to work. Germany's post-Hartz system is an example of the latter. Higher minimum wages would force people out of work, but they would also motivate higher cap-ex in automation. Higher labor costs would make certain overly expensive automation projects more tractable to corporate management. The unemployed would get an opportunity to retrain for better, higher paying jobs and do so while having basic needs met. You can probably see though how this solution is basically impossible in the current political climate.