Robert VerBruggen of National Review Online explores pros and cons of government policies tied to paid parental leave.
The hardline free-marketeers do have a point: The government is big enough. If we’re going to create a new benefit, it should be paid for by reforming, consolidating, or cutting other programs. (Apparently, some members of the working group agree with me here.) It’s not necessarily a problem to levy a new payroll tax to create a dedicated funding stream for parental leave, but that should be paired with tax and spending cuts elsewhere so that neither the government nor the deficit grows. …
… A deep problem with the proposal, and indeed with the very concept of paid parental leave, is that it blunts the natural incentive for parents to go back to work promptly. Let’s say you’re entitled to 70 percent of your pay for staying home; but if you work instead of staying home, you get this 70 percent plus the remaining 30 percent (for full pay) — so you’re really working for a mere 30 percent of your pay (minus commuting expenses and the like). The point here is not that families should make one decision or the other. The point is that people should have the option of going back to work early and getting paid to do so — i.e., that they should evaluate the tradeoff themselves rather than watch helplessly while the government slams its fist on the scale.
