The financing need of equitable provision of paid maternal leave in the informal sector in Indonesia: a comparison of estimation methods

Abstract

Background Providing an enabling environment for breastfeeding is hampered by the inequitable implementation of paid maternity leave, primarily due to perceived or actual financial costs. To estimate the real cost of paid maternity leave requires using reliable methods. We compared methods utilized in two recent studies in Indonesia. Study A estimated the financial need of providing paid maternity leave in the formal sector with a 10-year forecast at 21% coverage of eligible mothers, while study B estimated similar costs for the informal sector at 100% coverage annually. Results are critical for guiding future application of either method to inform paid maternity leave policies. Methods We compared number of covered mothers working informally, total annual cost, and cost per mother. We modified some parameters used in study A (method A) to be similar to study B (method B) for comparison, namely the period of estimate (annual), coverage (100%), estimate of women potentially breastfeeding, exchange rate, female labor force participation rate, the percentage of women working in the informal sector, and adding administration cost. Results The methods differ in determining the number of mothers working in the informal sector who gave birth, the minimum wage as unit cost, and administrative cost. Both studies estimated the cost at various lengths of leave period. Method A requires more macro (e.g. national/regional) level data, while method B involves (e.g. individual) micro level data. We compared the results of method A with method B, respectively: 1) number of covered mothers working informally were 1,425,589 vs. 1,147,204; 2) total annual costs including administrative costs were US$650,230,167 vs. US$633,942,726, and; 3) cost/mother was US$456 vs US$553. Conclusion Certain flexibilities can be applied to both methods, namely using parameters specific to respective regions (e.g. provincial level parameters), flexible period of analysis, and the use of administrative cost. In a setting where micro data is scarce and not easily accessible, method A provides a feasible approach, while method B will be most appropriate if suitable micro data is available. Future comparison studies in other settings are needed to provide further evidence on the strengths and weaknesses of both methods.

Association between maternity leave policies and postpartum depression: a systematic review

“…Unfortunately, this population is underrepresented in the reviewed studies. In order to grant informal working women and their children the economic and health benefits of maternity leave, governments could consider mechanisms to provide paid leaves to women in the informal workforce, an initiative already assessed theoretically in countries like Indonesia (Siregar et al 2021 ).…”

Awareness, Perceptions, Gaps, and Uptake of Maternity Protection among Formally Employed Women in Vietnam

“…With an estimated two thirds of the labor force in Vietnam ineligible for paid maternity leave [19], many families are unable to benefit from paid parental leave [27-29]. Extending maternity protection and support to female workers in the informal sector, those who have not contributed to the social insurance fund long enough to receive entitlements, or to all women regardless of employment status, could improve breastfeeding rates and related health outcomes, while making vulnerable households more resilient to financial shocks and contributing toward social and health equity [33,[39][40][41].…”

Interventions and policy approaches to promote equity in breastfeeding

“…Therefore, there is strong justification to mandate maternity benefits for women employed in the informal sector but how to do so remains a complex challenge that requires shorter-term innovative and pragmatic approaches. In this collection, two papers explore the cost of implementing a maternity cash transfer [ 29 , 30 ] in three different countries (Brazil, Ghana, and Indonesia) among women employed in the informal economy. Findings suggest that implementing such intervention would take a negligible percentage of the gross domestic product (GDP) - below 0.8% in all cases -, and such cash transfer could increase the chances that a working woman employed in the informal sector could ensure a basic level of income for her and her family empowering women to stay home with their babies without facing a loss of income.…”

“…This could have further long-term benefits including improved health and nutrition for the infant, human capital development, gender equity, and national development. Keeping in line with the inclusion of innovative methodological approaches in this collection, Siregar et al [ 30 ] performed and compared the financial estimations for maternity leave benefits for women working in the informal sector in Indonesia using two different costing approaches, and demonstrating that similar findings were obtained regardless of methodology used. It is reassuring that reliable methods are now available to cost out maternity benefits for highly vulnerable women.…”