MAXIMISING GAINS FROM TRADE
Begin with the truth that Swedish dad and mom at present obtain intensive paid depart upon the delivery of a kid, and so it may be stated they’re already paid to take care of their youngsters. Whether or not or not you agree with that coverage, it’s longstanding and well-established. Take it as a given.
Now think about that you’re an formidable Swedish physician or lawyer, climbing the profession ladder, and are self-aware sufficient to grasp you don’t at all times have totally the proper diploma of pure persistence needed for parenting. In that case, you would possibly want to return to work following the delivery of your baby. Underneath the established order ex ante, you may not work and draw your regular wage and nonetheless get the total childcare profit, though some baby advantages are paid routinely.
There’s thus a possible inefficiency within the system. It’s possible you’ll keep at residence simply to get the cash, even when an alternate association is likely to be higher for everybody.
Now add grandparents to this equation. If the grandparents may be paid to maintain your baby, abruptly the prolonged household as an entire doesn’t lose the cash by having the dad or mum return to work. As a substitute, that cash is transferred to the grandparents, so the work disincentive is diminished.
And economists will let you know that the dad and mom and grandparents can do their very own settling up. If the grandparents are well-to-do, for example, and wanting to spend time with their grandkids, they could funnel a few of that cash again to the dad and mom or the kid, both instantly or not directly. In some circumstances, on internet, the grandparents could not find yourself getting paid something in any respect.
In essence, you may consider this coverage as a mannequin designed to maximise features from commerce.
