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Unequal Use of Social Insurance Benefits: The Role of Employers

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Listed:
  • Bana, Sarah

    (Chapman University)

  • Bedard, Kelly

    (University of California, Santa Barbara)

  • Rossin-Slater, Maya

    (Stanford University)

  • Stearns, Jenna

    (University of California, Davis)

Abstract

California's Disability Insurance (DI) and Paid Family Leave (PFL) programs have become important sources of social insurance, with benefit payments now exceeding those of the state's Unemployment Insurance program. However, there is considerable inequality in program take-up. While existing research shows that firm-specific factors explain a significant part of the growing earnings inequality in the U.S., little is known about the role of firms in determining the use of public leave-taking benefits. Using administrative data from California, we find strong evidence that DI and PFL program take-up is substantially higher in firms with high earnings premiums. A one standard deviation increase in the firm premium is associated with a 57 percent higher claim rate incidence. Our results suggest that changes in firm behavior have the potential to impact social insurance use and thus reduce an important dimension of inequality in America.

Suggested Citation

  • Bana, Sarah & Bedard, Kelly & Rossin-Slater, Maya & Stearns, Jenna, 2018. "Unequal Use of Social Insurance Benefits: The Role of Employers," IZA Discussion Papers 11882, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11882
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    Cited by:

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    2. Brenøe, Anne Ardila & Canaan, Serena & Harmon, Nikolaj & Royer, Heather, 2019. "Is Parental Leave Costly for Firms and Coworkers?," IZA Discussion Papers 12870, Institute of Labor Economics (IZA).
    3. Schmutte, Ian M. & Skira, Meghan M., 2020. "The Response of Firms to Maternity Leave and Sickness Absence," GLO Discussion Paper Series 691, Global Labor Organization (GLO).
    4. Sarah H. Bana & Kelly Bedard & Maya Rossin‐Slater, 2020. "The Impacts of Paid Family Leave Benefits: Regression Kink Evidence from California Administrative Data," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(4), pages 888-929, September.
    5. Lachowska, Marta & Mas, Alexandre & Saggio, Raffaele & Woodbury, Stephen A., 2023. "Do firm effects drift? Evidence from Washington administrative data," Journal of Econometrics, Elsevier, vol. 233(2), pages 375-395.
    6. Jason Sockin, 2022. "Show Me the Amenity: Are Higher-Paying Firms Better All Around?," CESifo Working Paper Series 9842, CESifo.
    7. Claudia Goldin & Sari Pekkala Kerr & Claudia Olivetti, 2020. "Why Firms Offer Paid Parental Leave: An Exploratory Study," NBER Working Papers 26617, National Bureau of Economic Research, Inc.
    8. Slopen, Meredith, 2023. "The impact of paid sick leave mandates on women's health," Social Science & Medicine, Elsevier, vol. 323(C).
    9. Bartel, Ann P. & Rossin-Slater, Maya & Ruhm, Christopher J. & Slopen, Meredith & Waldfogel, Jane, 2021. "The Impact of Paid Family Leave on Employers: Evidence from New York," IZA Discussion Papers 14262, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    disability insurance; paid family leave; social insurance; firm premium;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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