A future with paid family leave?

September 14, 2016

A Future with Paid Family Leave?

With the Trump Campaign announcing support for paid family leave for mothers for the first time in a Presidential race both major candidates for President are publicly supporting paid family leave.

While paid family leave is common in all advanced developed countries outside the United States, it is only found in a handful  and growing number of states who have adopted it: California, New Jersey, Washington, D.C., Connecticut, Maine, Massachusetts, Minnesota,, Rhode Island, Washington state, and soon New York.  It has been implemented the longest in California and New Jersey. http://www.politifact.com/truth-o-meter/statements/2016/jul/25/kirsten-gillibrand/yes-us-only-industrialized-nation-without-paid-fam/

Opponents have long complained about the cost and disruptions to business that might accompany it, but states that have enacted paid family leave do not impose any direct costs on employers.  Most states use some kind of modest payroll tax on a capped portion of wages that could be as low as 0.1 percent or as high as 1 percent depending on the nature of the leave benefits being offered (California’s short-term disability is more encompassing than just paid family leave and they don’t separate out the paid leave component in the tax rate).  http://www.nationalpartnership.org/research-library/work-family/paid-leave/state-paid-family-leave-laws.pdf


Impact on Employers

Research on employers in California has found very little problems with implementation or need to replace workers.  In fact, employers have been more likely to note positive than negative impacts on worker productivity.  And one surprising finding was that smaller employers reported slightly more positive outcomes than larger employers. http://cepr.net/documents/publications/paid-family-leave-1-2011.pdf

Most encouraging have also been early findings relative to child development, abuse and labor force attachment.

Limitations of FMLA

Under the Family and Medical Leave Act parents can take up to 12 weeks of unpaid leave, though few take the maximum.  About four-tenths of first-time mothers in the labor force currently take some unpaid time off (half take paid time with some doing both paid and unpaid) at the birth of their child.  Many, but not all, are covered by the FMLA.  Still, about one in five first-time mothers in the labor force quits work, often due to the challenges of managing work and a newborn, especially mothers with less formal education.   http://www.census.gov/prod/2011pubs/p70-128.pdf

Under the FMLA to qualify workers must be employed with that employer for at least 12 months and accumulate at least 1,250 hours of paid work.  The employer is exempt if it has less than 50 employees (actual rule is bit more complex).  Consequently, low-wage workers who often change jobs and part-time employees are far more likely to find they don’t have coverage under the FMLA.  Overall, about three-quarters of workers are covered by the FLMA (https://www.whitehouse.gov/sites/default/files/docs/leave_report_final.pdf).  Lower wage workers are also least likely to be able to afford unpaid leave anyway or would need to curtail the length of the leave due to economic reasons. (http://theemplawyerologist.com/2015/03/26/when-isnt-your-employee-eligible-for-fmla-leave/).

Benefits for Child Development and Families

Better connection with newborns and parents has important genetic consequences, due to epigenetic changes that occur during the early months of life (http://developingchild.harvard.edu/wp-content/uploads/2010/05/Early-Experiences-Can-Alter-Gene-Expression-and-Affect-Long-Term-Development.pdf).

Paid family leave when provided to fathers has been shown to contribute to both more involvement of the fathers with their child’s upbringing, more sharing of household chores, and improved earnings of mothers  (not part of the Trump proposal)—see https://www.dol.gov/asp/policy-development/paternityBrief.pdf


Less likelihood of Child Abuse

A recently published study compared California to other states to examine infant trauma cases both before and after California’s implementation of paid family leave.  That study found significant declines in California in infant abuse compared to the other states. The comparison states without paid family leave at the time  used in the study included Arizona, Colorado, Iowa, Maryland, Massachusetts, and Wisconsin. http://www.sciencenewsline.com/news/2016022606250001.html.


Mothers less likely to need public assistance

Having a child can put a lot of strain on keeping a job after pregnancy.  Additional research has found paid family leave can be particularly helpful to lower income mothers.  Comparing states that had paid family leave to those that did not provide paid family leave led to an increasing ability to take family leave.

The flexibility provided with paid family leave also corresponds with stronger labor force outcomes in the year following the birth, as women and low income women who had access to paid family leave were less likely to need public assistance and food stamps after the birth than working women who did not have access to paid family leave (http://go.nationalpartnership.org/site/DocServer/RutgersCWW_Policy_Matters_April2012.pdf see chart on last page of appendix for the regression analysis)

The greatest increase in California among those taking leave once paid leave was introduced in California was among unmarried, less educated and minority mothers. https://www.dol.gov/asp/evaluation/reports/PaidLeaveDeliverable.pdf

This issue brief is not a comprehensive cost-benefit evaluation but instead provides a summary of research outcomes that are suggestive of the possible benefits of paid family leave.


Dave Wells is research director of the Grand Canyon Institute