The effect of paid family leave on job retention–Health care economist

Paid Family Leave (PFL) provides paid leave for workers who care for a newborn (parental leave) or care for a sick or temporarily disabled family member (caregiver leave). The United States is one of the few countries that does not offer PFL, but a number of countries have decided to adopt their own policy. California was the first state to enact a PFL and did so in 2004. To date, 11 states (plus D.C.) have some PFL.

To better understand how PFL affects job retention, a paper by Coile, Rossin-Slater, and Su (2022) relies on a difference-by-difference strategy to examine trends in job retention before and after the enactment of the PFL. The authors focus on introducing PFL in 3 large states: California, New York, and New Jersey. They use data from the 1996-2019 Medical Expenditure Panel Survey (MEPS) to identify workers whose spouses or children experienced health trauma (i.e., hospitalization or surgery) during the survey. Based on this approach, the authors found that:

… Reaching the PFL results in a 7.0 percentage point decrease in the likelihood that working wives whose husbands received a report of hospitalization or surgery “left work to take care of home or family” in post-health trauma survey interviews. For men, there is no such effect. This gender difference in the effect of access to PFL is consistent with previous literature finding that women are more likely than men to be involved in providing care for their sick spouses. Interestingly, the effects of PFL access on employment concentrated among spousal caregivers with lower levels of education, suggesting that government-delivered PFL may reduce pre-existing disparities in leave use and associated outcomes.

You can read the full paper or a summary of the NBER newsletter.

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