(MONEY Magazine) – Compared with other wealthy democracies, our country does little to help parents cope with new babies or pay for child care. Granted, the Family and Medical Leave Act that President Clinton signed last February lets parents of newborns and newly adopted children take as much as 12 weeks off from their jobs. However, the law excludes the 61% of workers whose companies employ fewer than 50. The leave also is unpaid, making it a luxury few low-income families can afford. In addition, the dearth of inexpensive day care swells our welfare rolls because many single mothers can't find work that pays enough to support child care, so they go on the dole. Contrast our miserly system with the more generous benefits in Sweden, where parents get 15 months of government-paid leave to divide between them as they wish during the first eight years of a child's life. For the first 360 days, a parent on leave receives a munificent 90% of salary, up to a maximum of 258,000 Swedish kronor (about $35,300 per year; all subsequent figures are in U.S. dollars using the exchange rates prevailing in late April). The last 90 days are paid at a flat $8 a day. Eighty-five percent of the $2.4 billion annual cost comes from Sweden's social insurance fund, which also pays for universal health insurance and other benefits and is financed by an employer- paid payroll tax of 31% (ours is 7.65%); the other 15% comes out of general tax revenues. Then when Swedish mothers like Ulla Nord, who is profiled at left, return to work, they can enroll their preschoolers in city-run day-care centers that are 89% funded by local and national tax dollars. The rest comes from parents, who pay only $135 to $250 a month, depending on their incomes. By contrast, the average monthly cost of day care in the U.S. is $277, and only 3.3% of all families get direct government aid to cover fees. Sweden's social policies are not without drawbacks, of course. Its day-care $ centers cost more to run ($10,730 a year per child, on average) than similar facilities in other countries (in the U.S., the cost is about $3,330 per child). Apparently, there's little incentive for the government to increase the efficiency of its day-care monopoly. And Sweden's parental leave policy fosters rampant discrimination against women in the private sector. Says Hansi Danroth, a male 27-year-old real estate broker in Stockholm: "Prospective employers have asked my sister if she plans to have kids. If I'm competing for a job with an equally qualified girl my age, it's an unwritten rule that I'll get it." Result: More than half of the working women are employed in the public sector, vs. only 22% of men. But though no budget-minded American politician would advocate adopting the Swedish system wholesale, child development experts argue persuasively that some aspects of it are worth borrowing. First, we would not reduce our global competitiveness by making parental leave a universal, paid benefit, as it is in nearly every industrialized nation. Susanne A. Stoiber, director of social and economic studies at the National Research Council, argues that the burden needn't be overwhelming even for small companies if the leave is relatively short -- say, six months. "That's about as far as you can push it without hurting employers and damaging women's chances of getting hired," concludes Stoiber, who has studied parental leave in three European countries. She also advocates paying parents on leave 50% to 60% of their after-tax incomes. Estimated annual cost: $8.3 billion to $10 billion, based on the U.S. General Accounting Office's assumption that 908,000 Americans would qualify for such leave under the Family and Medical Leave Act. As for child care, studies show that we would be wasting tax dollars if we gave subsidies to the affluent, as Sweden does. According to a 1990 Urban Institute survey, the 32% of families who earn more than $50,000 a year devote a manageable 6.2% of their income to child care. In sharp contrast, the 17% of families making less than $15,000 pay a debilitating 25%. Though families can claim a tax credit of as much as $1,440 for these expenses, the poor are less likely than others to do so, often because they are ignorant of the law. The best way to provide affordable high-quality child care, say many child-care experts, is to subsidize the enrollment of poor children in day-care centers operated by religious or nonprofit groups, which figure to run them more efficiently than the government would. To qualify, centers would have to meet higher staffing and safety standards than they do now. Interestingly, the Swedes themselves, who replaced a socialist government with a right-center coalition in 1991, are leaning toward privatization. Says vice prime minister and minister of social affairs Bengt Westerberg: "In the next decade, I would like to see parents have more freedom to choose between state-run and private day-care centers." Guaranteeing decent child care to low-income parents would do much to fulfill President Clinton's campaign promise to end welfare as we know it. And rather than encouraging single mothers to go on the dole, our welfare system could do as Sweden's does -- provide incentives to postpone childbearing (teenagers account for only 6% of all unmarried mothers there, vs. 33% here) and keep working. Consider that a 25-year-old Swedish woman earning $20,000 a year who bears a child out of wedlock can collect a total of $21,200 in government benefits for the first 12 months she's on leave, while an unmarried teenage mother who doesn't work gets only $3,200. Says Martin Rein, professor of social policy in the Department of Urban Studies and Planning at the Massachusetts Institute of Technology: "Single mothers in Sweden can't afford not to work."

CHART: NOT AVAILABLE CREDIT: SWEDISH MINISTRY OF HEALTH AND SOCIAL AFFAIRS, SOCIETY FOR HUMAN RESOURCE MANAGEMENT CAPTION: MINIMUM AMOUNT OF LEAVE TIME THAT EMPLOYERS MUST GIVE NEW PARENTS: Sweden 15 months, paid U.S. 3 months, unpaid