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The Role of Paid Family Leave in Labor Supply Responses to a Spouse’s Disability or Health Shock

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  • Priyanka Anand
  • Laura Dague
  • Kathryn L. Wagner

Abstract

The onset of a disability or major health shock can affect the labor supply of not only those experiencing the event but also their family members. Potential caregivers face a tradeoff between time spent earning income for the family and providing care for their spouse, which could be affected by the availability of paid leave. We examine caregiving and labor supply decisions after a spouse’s disability or health shock and the role of paid leave laws implemented in California and New Jersey in the response using data from the Survey of Income and Program Participation (SIPP). We show that labor force participation of potential caregivers decreased after spousal work-limiting disability or chronic health condition and, to a lesser extent, work-limiting illness. We find that paid leave reduces the likelihood that potential caregivers decrease their work hours to provide caregiving to their spouse after a work-limiting disability or chronic health condition, but limited evidence of effects on other employment outcomes. Our findings demonstrate that spousal disability and health shocks have long-run effects on household labor supply and therefore could be mediated by paid leave; we conclude by discussing possible reasons for finding limited impact in this context.

Suggested Citation

  • Priyanka Anand & Laura Dague & Kathryn L. Wagner, 2021. "The Role of Paid Family Leave in Labor Supply Responses to a Spouse’s Disability or Health Shock," NBER Working Papers 28808, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:28808
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    Cited by:

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    3. Charlene Marie Kalenkoski & Sabrina Wulff Pabilonia, 2023. "Parental disability and teenagers’ time allocation," Review of Economics of the Household, Springer, vol. 21(4), pages 1379-1407, December.
    4. Braga, Breno & Butrica, Barbara A. & Mudrazija, Stipica & Peters, H.E., 2022. "Impacts of State Paid Family Leave Policies for Older Workers with Spouses or Parents in Poor Health," IZA Discussion Papers 15007, Institute of Labor Economics (IZA).
    5. Ning Li, 2023. "Health and household labor supply: instantaneous and adaptive behavior of an aging workforce," Review of Economics of the Household, Springer, vol. 21(4), pages 1359-1378, December.
    6. Coe, Norma B. & Goda, Gopi Shah & Van Houtven, Courtney Harold, 2023. "Family spillovers and long-term care insurance," Journal of Health Economics, Elsevier, vol. 90(C).
    7. Pichler, Stefan & Ziebarth, Nicolas R., 2024. "Sick Leave and Medical Leave in the United States: A Categorization and Recent Trends," IZA Policy Papers 206, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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