The effects of paid family leave on parents' labor market outcomes

The USA falls behind all other developed nations when it comes to offering paid parental leave. Since the Family Medical Leave Act was implemented in 1993, few changes have been made at the state level, but no changes at the federal level. Even though some states mandate paid parental leave and some employers opt to offer this benefit to their employees, there is no mandated paid leave at the federal level. This research investigates the impact of paid parental leave on parents’ labor market outcomes such as leave-taking, hours worked, and change in employers. Parental leave-taking has been proven to impact children, parents, and the family unit positively. This project uses Annual Social and Economic Supplement of the Current Population Survey data and employs a multivariate triple difference analysis. Our main findings are that when a paid leave program is available, mothers increase the maternal use of time off from work by 4.3% points during the child’s first year, the equivalent of 2.24 additional weeks. They also are 41% more likely to take time off from work than before the paid parental leave was implemented. State-level paid leave programs increase leave-taking among fathers by a factor of 3.5, which amounts to almost one more workweek of paid leave used. The number of employers and the number of hours and weeks worked decline for fathers who have access to paid leave, but the magnitude of the effect is very small.