Work-life balance: parental leave policies in Israel

Working Women

Employment rates for Israeli women are relatively high and have been improving over time. In 2014, the employment rate of women in Israel was 7 percentage points higher than that of women in the OECD. Between 1990 and 2014, employment rates for Israeli women of prime working age (25-54) grew by 20 percentage points. In fact, the employment rates of Jewish men and women in this age group are now nearly identical to one another.

In a recent Taub Center policy brief, Policy Director Liora Bowers and Researcher Hadas Fuchs find that notable growth in employment has occurred among mothers of young children (ages 0-4), particularly among those without a university education. Only about half of women aged 30-40 with children ages 0-4 were employed in 1995, while in 2011, as shown in the graph below, the figure rose to 69%. The employment rate for mothers of young children with an academic degree increased from 78% in 1995 to 84% in 2011, while the increase in employment among women without a university education was greater: from 47% in 1995 to 57% in 2011 and 61% in 2015.

Still, about 33% of women in Israel aged 30-54 work part-time, in comparison to 15% of men. Half of women working part-time cite that caring for their children is the main reason for their limited employment. Also, there remains a 14% gap in hourly wages between men and women in Israel, which is similar to the average gender wage gap in OECD countries.

Employment Rights

Israel’s current government policies around parental leave include a number of important rights, among them: job protection during pregnancy and for up to one year after birth, 100% salary replacement during the months of paid maternity leave, and a one hour paid reduction in working hours during the months following maternity leave. However, in some areas, there is a gap between Israel’s policies toward parents and the policies of other OECD countries.

One of the notable differences between Israel and other OECD countries is in policies related to paternity leave. Unlike the 20 OECD countries that provide either partial or full paid paternity leave for fathers immediately following the birth, Israel did not provide this benefit as of early 2016 (at the time that Bowers and Fuchs conducted their research). Bowers and Fuchs found that 75% of fathers take advantage of this benefit in the countries where it is offered. In June of 2016, the Knesset’s plenary approved legislation making Israeli fathers eligible for six days of paid paternity leave following the birth of a child, including the day of the birth itself. Three of these days will come from the father’s sick leave and the remaining three will come from his annual vacation days. Legislation passed in July of 2016 included two other notable changes to Israel’s policies. Firstly, the one-hour paid reduction in working hours during the months following birth that previously had been granted only to mothers can now be shared with fathers, as well. Secondly, the term used in Israel’s policies surrounding birth will be changed from “maternity leave” to “parental leave.”[1]

Aside from paternity leave, there are 13 OECD countries that provide a paid parental leave benefit that is specifically allocated to fathers. As a result, on average in the OECD, 16% of individuals who take some leave to care for a child are men. In Israel, despite the fact that mothers are allowed to share some of their maternity leave time with their spouse, only 0.4% of individuals taking some leave are men.

Examining the paid leave granted to mothers, Bowers and Fuchs find that Israel grants less leave per child than the average in OECD countries. However, fertility rates in Israel are much higher than those in the OECD (an average of 3 children per woman in Israel, compared with 1.7 on average in the OECD). As such, it is more costly for the country to provide for the same length of maternity leave per child (paid and unpaid), because of the financial cost to the state and the impact on the broader economy. In addition, Israel also provides for 100% wage replacement during maternity leave, while 21 OECD countries pay less than a woman’s full salary during leave. 100% wage replacement makes sense from a policy perspective for three main reasons: less than a full salary could discourage fathers – who are more likely to have higher earnings – from taking part of the leave; reducing income just as a family faces the additional expenses related to a new child can burden families; and the lower wages distributed over a longer period of time keep women out of the workforce for longer – which can ultimately hurt their careers. The figure below shows that, when comparing the length of paid leave granted throughout a woman’s lifetime, rather than per child, Israel is close to the OECD average: 42 weeks of full-rate equivalent salary (i.e., the adjusted number of weeks of paid leave received over an individual’s lifetime at 100% of the individual’s average wage) compared to 44 weeks in the OECD.

A woman in Israel is eligible for 12 weeks of unpaid maternity leave with full social protections, following the 14 weeks of paid leave. She can extend her “leave without pay” for a quarter of the length of her employment, up to a maximum of one year. However the “leave without pay” benefit is not well known (only 12% of women take more than six months of leave per child) and requires a woman to give up some of her social protections for that period including increases in seniority, sick leave, and severance benefits. The common practice in the OECD, on the other hand, is one unpaid leave benefit that is granted uniformly to all women who have worked at least 12 months with their current employer.

Another difference between the policies in OECD countries and Israel is that in the OECD there is more flexibility when returning to work after leave. When maternity leave is over in Israel, women are expected to return to the workplace in the same capacity as before the birth of the child. In contrast, about half of OECD countries allow parents to return to work gradually – by utilizing parental leave benefits to return to work on a part-time basis. In most such countries, the worker also has the right to return to full-time employment when they request to do so.

Based on the above findings, Bowers and Fuchs identify that the following measures would be necessary to align Israel’s policies with those of other OECD countries:

• Provide 1.5 paid weeks of leave for fathers upon the birth of a child; the recently approved legislation ensuring six days of paternity leave is a step in this direction;
• Combine the 12 weeks of unpaid maternity leave and up to one year of “leave without pay” benefits into one six-month benefit renamed “parental leave,” to be provided to a parent who has worked at least twelve months with their current employer;
• Allow parents to use some of the leave currently granted by the law to return to work part-time, extending the overall time the parent is on some form of leave.

[1] The term will be changed from “חופשת לידה” to “תקופת לידה והורות”.