Estonia: Identifying ways to improve the parental leave system

This study looked at parental leave schemes and benefits in place in Estonia with a view to assessing how well the existing system meets the needs of parents and employers. The aim was to identify new solutions to support policy development and to suggest ways to change the system to support work–life balance better and to increase the take-up of parental leave by fathers.

Background

A study by the Praxis Centre for Policy Studies investigated all the leave schemes in place for parents with small children (in Estonian, 1.98 MB PDF) to assess whether the current parental leave system and benefits meet the needs of parents and employers. The study looked at how the current system supports family and work reconciliation, what should be changed and how fathers' take-up of parental leave could be increased.

Methodology

The study involved a formative policy analysis that combined qualitative and quantitative methods including a systematic literature review, parametric approach, focus group interviews, registry data analysis and compilation of scenarios.

The analysis was divided into two stages. The first stage laid the foundation for a conceptual framework for the analysis. The second stage involved analysing different possible scenarios of the parental leave system and putting forward recommendations for change based on the findings of the comparative analysis.

The conceptual framework comprised three phases:

  • carrying out a systematic literature review;
  • developing the scenario framework;
  • legal approach to the scenario analysis.

The scenario analysis involved:

  • analysis of the current system of parental leave in Estonia;
  • drafting a range of potential scenarios for the parental leave system;
  • comparative analysis of these scenarios;
  • drawing up of recommendations.

Key findings

The overall conclusion of the study was that better work–life reconciliation and an increase in the rate of take-up by fathers of parental leave cannot be achieved without significant changes to both leave and benefit schemes.

The current system was found to be too rigid. To improve parents’ opportunities for better work–life balance, it is therefore necessary to make the current system more flexible. However, greater flexibility requires significant changes which, in turn, cannot be made without the state being willing to invest in the development of the necessary registers and databases.

As well as increasing benefit replacement rates, it is also important to increase the diversity of work–life balance opportunities. Families should be given greater power to decide how they would use the parental leave benefit, taking into account the childcare opportunities provided by local government and their family's opportunities to make use of different options.

To increase the take-up rate of parental leave by fathers, the state should send a clear message to families and employers that a father's contribution to childcare is equally as important as the mother's contribution. The study found that, despite gender neutral legislation which provides equal opportunities for both parents to take parental leave, the current system favours the traditional gender roles of the mother as the primary caregiver and the father as the main bread-winner.

The study found that other countries have been effective in abolishing gender stereotypes by assigning part of the parental leave to fathers and encouraging men to take it up. Also, the take-up of parental leave by fathers can be increased by making more flexible use of leave possible and by providing a greater choice of options.

Recommendations

The study made a number of recommendations to support parents with small children to better reconcile their work and family life. 

  1. To make the parental leave system more flexible, parents should be able to take paid parental leave days over a longer period of time and not just during the first one and a half years' of the child's life as in the current system; opt for so-called part-time leave and part-time work depending on their family's needs, with the workload and parental leave ratio being the parents' decision.
  2. Based on other countries' experience, the possibility of allocating a period of individual non-transferable parental leave only to fathers should be considered to increase take-up rates by fathers.  However, any additional conditions (such as flexible use of parental leave or extension of parental leave depending on a family's needs) should avoid potentially unfavourable implications for families.
  3. In addition, families should have a stronger say in the timing of the period of individual non-transferable parental leave and there should be special leave provision for single parents.
  4. To encourage employers to support a more flexible parental leave system, proportional notice periods should be implemented according to the period of the parental leave: that is, a longer advance notice period should be stipulated for parents who decide to take longer parental leave but who also want to work part time, and vice versa.
  5. Allowing employees to make changes in a previously agreed arrangement about when they take parental leave would motivate employers and employees to agree on the terms and conditions of the use of parental leave before an employee started parental leave. It would also give employers greater say in whether and on what terms the employee's preferred parental leave option would be allowed.

Whether these recommendations are implemented or not, the study set out the following principles to be taken into consideration when designing Estonia's parental leave system in the future.

  • The replacement income (benefit) should ensure sufficient income for all recipients: marginal replacement income from the state would not meet the purpose.
  • The award of the replacement income should not depend on random factors such as the child's birth date which, as a result, could affect the amount of benefit paid. 
  • The regulation of parental leave should be clear and interpreted unambiguously by employers and employees.

The study also emphasised that, despite the potential increase in parental leave costs, the extra cost of some recommendations could be alleviated or even avoided through well-considered decisions taken by both employees and employers.

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