This article constructs a theoretical and evidence-based argument concerning why maternity and parental leave policy must be viewed as human capital investment policy. It is argued that income support schemes which allow for (1) parental choice in terms of care and (2) inclusion of different income groups offer relative advantages over other alternatives in terms of both equity and political feasibility.
Skill formation is a dynamic process with strong synergistic components. Skill begets skill. Early investment promotes later investment. At current levels of investment, American society underinvests in the very young. When offered choices and the opportunity to experiment, most parents generally choose wisely, at least after they have gained some experience.
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