When a full-time working woman has a baby, her employer must give her the legally required benefits of maternity leave. Sometimes though, women don't return to work after their maternity leaves and end up costing their companies money, says economist Charles Wheelan. Jean talks with Charles, known for his column "The Naked Economist" on Yahoo! Finance, about using economics to shed light on the issue of maternity leave.
Charles says companies could be more willing to give a more generous maternity leave to valued workers—perhaps up to six months paid time off—if there were a policy in place to protect the companies financially from those who take leave and never come back to work. "You can arguably make working women better off if you get a little tougher on maternity leave," Charles says.
An economically sound argument could be to make a woman refund the paid leave to her company if she doesn't return to work, Charles says. Another solution could be to phase in paid leave over time once a woman comes back to work, he says. "Your first thought is, 'Is this guy trying to get tough on women?' … But, I think the essence of economics is thinking through the incentives," Charles says. "This idea of moving away from maternity leave as kind of a parting bonus or just something you get, to maternity leave as something you get for leaving and coming back for a spell, is the essence of where you've got to go."