Family Leave Policies Must Not Jeopardise Productivity

Research shows that increasing parental leave is not a guaranteed solution to improving fertility rates

The Malta Chamber of Commerce, Enterprise and Industry acknowledges the importance of policies that improve the quality of life for families and support better work-life balance. However, while The Malta Chamber is supportive of initiatives that ease the pressures on working families, these policies must be designed carefully and sustainably. Such a sensitive and important subject should not descend into a populist competition over who can promise the most generous benefits or the longest periods of leave, without first understanding the implications on productivity and our country’s competitiveness. Unsound measures will ultimately be borne by businesses and taxpayers, and risk undermining the competitiveness and productivity of Maltese businesses.

Research shows that increasing parental, paternal or maternity leave is not a guaranteed solution to improving fertility rates. Studies highlight that while there are instances where longer and paid leave policies may have a positive outcome, the deeper causes of declining fertility – such as increase in housing costs, economic instability and constraints, high living costs, lack of childcare solutions, pursuit of higher education and greater female labour force participation, as well as reconciling work and family life challenges – play a far greater role in family planning decisions. Extending leave without addressing these fundamental issues would risk creating costly policies with little meaningful impact.

The Malta Chamber stresses that politicians should resist the temptation of identifying a problem and then immediately proposing a “fix” without proper research, consultation, and analysis. A piecemeal approach that focuses only on leave entitlement risks shifting attention away from the root causes.
A balanced approach should protect families’ wellbeing and keep businesses competitive.

The Malta Chamber urges Government, Opposition and policymakers to:
– Ground policy decisions in evidence-based research that reflects Malta’s realities
– Consider the broader socio-economic factors driving declining fertility, including cost of living and work support structures
– Avoid turning family policy into an electoral bidding war and
– Ensure that any new measures are sustainable, both financially and administratively.

Enhancing the quality of life for families is an important objective. However, it is necessary to also consider economic growth and productivity. Malta requires comprehensive and well-researched approaches rather than temporary measures.