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The majority of the population over time will use parental leave if it is available. Most people do have at least one child in their lifetime so this is a terri

The majority of the population over time will use parental leave if it is available. Most people do have at least one child in their lifetime so this is a terrible example of an entitlement which is unequally distributed. Health care is even worse, especially if you are guaranteeing access prospectively. Even people who are not currently using healthcare resources (hopefully most people) know that there is a very good change that they will have to and realistically as you age the chance that you need substantial medical care approaches 100% pretty rapidly. It is not a Ponzi scheme for a number of reasons. First, Ponzi schemes use money from new members to pay for older members. This might be a model for retirement spending (it isn't, see my next point) but it has the timeline reversed for parental leave. Parental leave is effectively funded by the fraction of the population not currently using it for the benefit of the fraction that currently is. It effectively serves a few different distributional roles: a) It moves resources from your own pre-child and post-parental leave career to the period when the child is born. Many people who can easily fund a year of not working from their total career earnings cannot do so in their peak child-bearing years and there aren't any efficient ways of using saving or borrowing to shift that money either. For these people, parental leave uses the risk pooling and payment guarantee capabilities of the state to effectively borrow cheaply against their lifetime earnings. b) It distributes resources from higher to lower earners, depending on how the obligation is structured there is usually a progressive taxation element which ensures a certain minimum is available. Second point, retirement schemes are also not Ponzi schemes. A Ponzi scheme requires an ever-increasing number of new entrants to maintain payouts. Pay-as-you-go retirement schemes require maintaining a balance between payers and payees which can be disrupted by changes to demographics but that does not mean that they are inherently fraudulent, just that in the presence of demographic trends which lead to a change in that ratio, they either need to reduce payouts, or increase payments in, or borrow to bridge temporary gaps. The difference is that in a Ponzi scheme, the changes required to maintain this are exponential and rapidly become impossible. There is no stable state to a Ponzi scheme.

endisneigh 5y ago
> The majority of the population over time will use parental leave if it is available. I agree with this. However: > b) It distributes resources from higher to lower earners, depending on how the obligation is structured there is usually a progressive taxation element which ensures a certain minimum is available. This is irrelevant to whether or not parental leave is a ponzi scheme. > a) It moves resources from your own pre-child and post-parental leave career to the period when the child is born. Many people who can easily fund a year of not working from their total career earnings cannot do so in their peak child-bearing years and there aren't any efficient ways of using saving or borrowing to shift that money either. For these people, parental leave uses the risk pooling and payment guarantee capabilities of the state to effectively borrow cheaply against their lifetime earnings. Parental leave’s true cost is more than just the income lost. It’s the labor required to raise the new children. If we say parents cannot just stay at home (in which case parental leave is unnecessary) then the people required to sustain the new children will be exponential in growth.
- Mvandenbergh 5y ago
  Parental leave temporarily moves labour output from the measurable "economy" to the non-measured domestic economy (and displaces a small amount of what would otherwise be wage-labour childcare by non-parents). Children raised in this way will require childcare of their own but I don't see how the labour required to raise children goes up over time unless the fraction of the population which is children goes up.

endisneigh 5y ago

> The majority of the population over time will use parental leave if it is available. I agree with this. However: > b) It distributes resources from higher to lower earners, depending on how the obligation is structured there is usually a progressive taxation element which ensures a certain minimum is available. This is irrelevant to whether or not parental leave is a ponzi scheme. > a) It moves resources from your own pre-child and post-parental leave career to the period when the child is born. Many people who can easily fund a year of not working from their total career earnings cannot do so in their peak child-bearing years and there aren't any efficient ways of using saving or borrowing to shift that money either. For these people, parental leave uses the risk pooling and payment guarantee capabilities of the state to effectively borrow cheaply against their lifetime earnings. Parental leave’s true cost is more than just the income lost. It’s the labor required to raise the new children. If we say parents cannot just stay at home (in which case parental leave is unnecessary) then the people required to sustain the new children will be exponential in growth.

Mvandenbergh 5y ago
Parental leave temporarily moves labour output from the measurable "economy" to the non-measured domestic economy (and displaces a small amount of what would otherwise be wage-labour childcare by non-parents). Children raised in this way will require childcare of their own but I don't see how the labour required to raise children goes up over time unless the fraction of the population which is children goes up.