The financing need for expanded maternity protection in Indonesia

Abstract

Background Almost half of all Indonesian children under 6 months of age were not exclusive breastfed in 2017. Optimizing maternity protection programs may result in increased breastfeeding rates. This study aims to: estimate the potential cost implications of optimizing the current paid maternity protection program, estimate budgets needed to increase coverage of lactation rooms in mid and large firms, and explore challenges in its implementation in Indonesia. Methods The potential cost implication of the current and increased maternity leave length (three and 6 months) as well as the potential budget impact to the government were estimated for 2020 to 2030. The cost of setting up lactation rooms in formal sector companies was estimated using the Alive & Thrive standards. Interviews were conducted in five different provinces to 29 respondents in 2016 to identify current and potential challenges in implementing both existing and improved maternity protection policies. Results The costs of expanding paid maternity leave from three to 6 months and incorporating standardized lactation rooms in 80% of medium and large size firms in Indonesia was estimated at US$1.0 billion (US$616.4/mother per year) from 2020 to 2030, covering roughly 1.7 million females. The cost of setting up a basic lactation room in 80% of medium and large companies may reach US$18.1 million over 10 years. The three main barriers to increasing breastfeeding rates were: breastmilk substitutes marketing practices, the lack of lactation rooms in workplaces, and local customs that may hamper breastfeeding according to recommendations. Conclusions The cost of expanding paid maternity leave is lower than the potential cost savings of US$ 1.5 billion from decreased child mortality and morbidity, maternal cancer rates and cognitive loss. Sharing the cost of paid maternity leave between government and the private sector may provide a feasible economic solution. The main barriers to increasing breastfeeding need to be overcome to reap the benefits of recommended breastfeeding practices. Electronic supplementary material The online version of this article (10.1186/s13006-019-0221-1) contains supplementary material, which is available to authorized users.

The annual cost of providing paid maternity leave in the informal sector in Indonesia 

“…The introduction of MCT in the informal sector may require significant advocacy to convince policy makers of the importance of the transfer program to implement at 100% coverage for 26 weeks. Given budget constraints can be one of the obstacles for implementing maternity protection policies [30,45], the initial introduction of MCT for the informal sector could start at a lower cash transfer benefit level and/or coverage (i.e. 13…”

“…Thus, although the total cost seems low in comparison to the total GDP, the cost per woman may not look appealing to policy makers. This can be challenging since budget availability has already been recognized as one of the issues faced in optimizing the more established paid maternity leave policy for the formal sector [30]. As MCT policies for informal workers currently do not exist, this challenge will require proper program and financial planning as well as support from the government and relevant stakeholders since even now the local government struggles with allocating its budget to support the policy for the formal sector, let alone the informal sector.…”

“…Previous studies in Indonesia have shown that the annual cost of not breastfeeding is large, ranging from 0.14% to 0.90% of Indonesia's GDP in 2018 [4][5][6] and outweighs the cost of paid maternity leave within the formal sector [30]. As women in low and middle income countries (including Indonesia) are more likely to work in the informal sector [31] and mostly are uncovered by maternity leave policies [32], paid maternity leave policies within the informal sector would potentially result in larger benefits both economically and non-economically than within the formal sector.…”

“…In Indonesia, the International Labour Organization (ILO) coverage classification put Indonesia in the 10 to 32% range [7], showing that the coverage even in the formal sector is not yet optimal. One of the disincentives of providing paid maternity leave is perceived or actual financial cost by employers [30,33]. Another issue is that the cost of supporting a maternity benefit for WRA working informally likely needs to be covered entirely by the government.…”

“…This study is the first to provide such cost estimates for Indonesia, and as such can provide urgently needed evidence for policy making purposes in the context of supporting recommended breastfeeding practices, especially given the relatively low health budget in Indonesia (under 5% share of GDP as of 2014) [45]. This study follows on our previous research on the cost to expand maternity protection for the formal sector [30] and begins to fill the gap in cost estimates for informal sector maternity benefits.…”