The financial crash and maternity leave. Impact on parents and legislation

Abstract

One of the effects of the bank crash that hit Iceland in 2008 was a severe cut in welfare spending. Parental leave was one of the spheres that were affected. In this article we will explain the origins and characteristics of the law on parental leave from 2000 and show how fathers and mothers used it. Then we discuss the changes that were made in the aftermath of the economic crisis, such as the cuts in economic compensation, and ask what effects this may have had on the uptake of parental leave and the situation of families with small children. This is based on data from the Parental Leave Fund on the one hand and, on the other hand, on the results from a survey among parents who had their first child in 2009. Finally, we discuss the changes in the laws on parental leave adopted by the Icelandic parliament in December 2012 where it was decided to extend in steps the individual rights of both parents to parental leave.