MBB stands by maternity leave report despite Scicluna report

The MBB insisted that its impact assessment was carried out in a “methodologically correct manner and presented clear, factual and realistic findings”.

“The evidence presented by the Scicluna Report does not lead the MBB to alter the views and opinions submitted in its original report,” the MBB added.

The MBB reiterated its position that extending the maternity leave to 20 weeks and introducing a two-week paternal leave “would clearly carry the risk of significant additional costs onto the productive economy without resulting into any materially-quantifiable benefits”.

While Edward Scicluna acknowledged that the MBB’s report was based on a “correct technical approach”, it questioned the assumptions made by the MBB.

In so doing, the report, which was presented by the Labour MEP and economist during an IDEAT seminar last Saturday, made “two fundamental departures” from the MBB report on maternity leave, stating that the economic benefits of extending maternity leave in Malta could be estimated, yet the costs of the proposed changes to the directive could not be estimated at this stage, and called for further surveys in this regard.

Scicluna estimated that the benefits of the implementation of the proposed changes to the directive would amount to an increase in female participation rate of 9 percentage points.

He also estimated that the costs of the proposed changes would not exceed €5 million per year, which was less than half the potential estimated cost of €12 million per year, as stated in the MBB report.

Finally, Scicluna advocated the use of a national survey exercise to estimate the costs that would be incurred should maternity leave be extended.  

The MBB claimed that “as acknowledged in the Scicluna Report itself”, this finding was itself “somewhat sui generis, especially when considered against the background of previous reports”.

According to the MBB, the assumption that female participation in the workforce would increase by 9 percentage points was “very high, especially when one considers that an average of 4,100 children are born each year”.

“Notwithstanding the fact that the Scicluna Report was calling for additional research exercise to be able to estimate the potential costs of extending maternity leave,, the Scicluna Report when forward and made such an estimate, placing such costs at no higher than €5 million per year.

This assumption was “based mainly on the premise that economic costs should only reflect the wage element and not include foregone profits and other costs such as substitutability of workers,” the MBB explained.

The MBB insisted that “any additional research and surveys would replicate, and indeed most probably verify, the findings of the MBB report”, which were themselves based on Labour Force Survey findings.

The MBB also contended that the realisation of the benefits of increased labour participation rates as postulated by Scicluna’s report were “totally dependent on the assumption that the women induced to join the labour force would actually find employment.

“Otherwise, higher costs associated with unemployment benefits may actually take hold,” the MBB warned.

The MBB also believed that Scicluna also made “valid observations” which were in line with the MBB’s own report, including the need for any costs arising out of extended leave not to be borne exclusively by employers and the need for more detailed statistical information leading to better decision-making on this subject.

The MBB reiterated its position that resources in the country “can be more productively utilised in improving support structures which simultaneously help to increase labour market participation, and bridging work-life commitments by contributing towards the proper upbringing of children”.