Question

What is the relationship between the welfare effect, demand/supply, and paid maternity/family leave?

Use economic reasoning

Answer 1

As the people ae provided with paid maternity/family leave the supply of labor in that particular industry increases because industry takes care of the needs of people. In the labor market, as the supply of labor increases, this will reduce wage rate and increase the level of employment in the economy and as the level of employment in an industry increases, the level of employment will also increase. Thus, welfare in the industry increases with fall in the wage rate and increase in the level of employment. Thus, paid maternity / family leave increases the supply of labor force which in turn increases the level of employment and reduces wage rate in the economy.