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The impact of paid family leave on household savings

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  • Rodgers, Luke P.

Abstract

Research on paid family leave (PFL) has largely focused on various child outcomes and the labor force outcomes of mothers. Absent from previous work is an analysis of how such a policy alters incentives to plan for expected income shocks, a central question in other social insurance contexts. A conceptual framework demonstrates the potential for PFL to increase or decrease household saving depending on labor supply flexibility assumptions. Using the Survey of Income and Program Participation, I present evidence that the introduction of PFL in California reduced the savings of expectant parents relative to different comparison groups. Imprecise heterogeneity analysis suggests the crowd out is concentrated in higher-income families.

Suggested Citation

  • Rodgers, Luke P., 2020. "The impact of paid family leave on household savings," Labour Economics, Elsevier, vol. 67(C).
  • Handle: RePEc:eee:labeco:v:67:y:2020:i:c:s0927537120301251
    DOI: 10.1016/j.labeco.2020.101921
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    References listed on IDEAS

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    More about this item

    Keywords

    Paid family leave; Household saving;

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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