7(38)
2
Background
In 1974 Sweden introduced parental leave insurance with earnings-related
benefits paid for six months after childbirth, entitling parents to share leave
as they preferred. The leave can be used until the child is eight years old.
The specific aim was to facilitate the combination of time at work and time
spent caring for children for men and women. The question of fathers’
participation in leave use was part of the debate from the beginning, and it
was suggested that half the leave should be allocated to the father, a
proposal that in the end was seen as too radical (Klinth 2002). Women
were anticipated to use most of the leave and the length was therefore
restricted to six months on the basis that longer leave would work to their
disadvantage in the labor market.
The benefit was set at 90 percent of earlier earnings, but if the using parent
had no previous earnings he or she received a low flat rate. The set-up
works as an incentive, especially for mothers, to enter the labor market
before embarking on parenthood. It also encourages the combination of
work and family rather than a choice between work and family.
In the 1980s leave rights were extended by stages to twelve months, and
in addition a further three months were paid at a flat rate. During the
1990s and the beginning of the 2000s the flat rate was 60 SEK (approx. 6
Euro) per day. Cutbacks in the rate of earnings-related benefits were made
during the economic crisis in the 1990s from 90 to 75 percent, later raised
to the current level of 80 percent. In 1995, one reserved month for each
parent was introduced, which meant that one month would be forfeited if
not used by the designated parent, a reform that was initiated by the
Liberal Social Minister in 1994. At the same time the leave was rendered
formally as individual implying that the parent who wanted to use more
than half of the leave needed the consent (by signature) of the other
parent. The reform applies to all parents with joint custody which is the
absolute majority in Sweden, also in cases of separated or divorced
parents. At the same time a flat-rate homecare allowance was introduced
for children up to the age of three. The homecare allowance was abolished
by the new Social Democratic government half a year later, but the
reserved months, often called “daddy” month and “mummy” month, were
kept.
In 2002, the leave was extended by one month to sixteen months
(including flat rate leave), at the same time as another reserved month for
each parent was introduced by the Social Democratic government. The
main difference between the first and second reserved months is thus that
in 2002 a month was added to the leave length, meaning that an increase
in one parent's leave did not necessarily mean a decrease in the other
parent's leave.
In 2006, the ceiling on the benefits was raised after a long period during
which it lagged behind, leaving many parents with less than 80 percent
income replacement. The raising of the ceiling was to some extent a reform
to encourage fathers’ leave use, as parents with income above the ceiling
were dominated by fathers. In addition the flat rate was raised to 180 SEK
(approx. 18 Euro) per day.
