MAXIMISING GAINS FROM TRADE
Begin with the truth that Swedish dad and mom presently 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 kids. 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 all the time have totally the precise diploma of pure persistence essential for parenting. In that case, you would possibly favor to return to work following the delivery of your little one. Beneath the established order ex ante, you can not work and draw your regular wage and nonetheless get the total childcare profit, despite the fact that some little one advantages are paid routinely.
There may be thus a possible inefficiency within the system. You might keep at house simply to get the cash, even when an alternate association may be higher for everybody.
Now add grandparents to this equation. If the grandparents might be paid to handle your little one, hastily the prolonged household as a complete doesn’t lose the cash by having the father or mother return to work. As a substitute, that cash is transferred to the grandparents, so the work disincentive is diminished.
And economists will inform you that the dad and mom and grandparents can do their very own settling up. If the grandparents are well-to-do, as an illustration, 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 immediately or not directly. In some circumstances, on internet, the grandparents could not find yourself getting paid something in any respect.
In essence, you’ll be able to consider this coverage as a mannequin designed to maximise positive factors from commerce.
