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HomeEconomyThe Impact of Paid Family Leave on Job Retention - Healthcare Economist

The Impact of Paid Family Leave on Job Retention – Healthcare Economist

Paid Family Leave (PFL) provides paid time off for employees who care for a newborn (parental leave) or care for a family member who is sick or temporarily disabled (carer’s leave). The United States is one of the few countries that does not offer PFLs, but many states have decided to adopt their own policies. California was the first state to enact the PFL in 2004. To date, 11 states (plus the District of Columbia) have enacted some PFLs.

To better understand how PFL affects job retention, an article by Coile, Rossin-Slater, and Su (2022) Rely on differential policies to examine job retention trends before and after the enactment of the PFL. The authors highlight the introduction of PFLs in 3 large states: California, New York, and New Jersey. They used data from the Medical Expenditure Panel Survey (MEPS) 1996-2019 to identify workers whose spouses or children experienced a health shock (ie, hospitalization or surgery) during the survey period. Based on this approach, the authors found that:

…working wives whose PFL resulted in their spouse’s hospitalization or surgery were 7.0 percentage points less likely to report “leaving work to care for home or family” in survey interviews after the health shock. For men, there is no such effect. This sex difference in access to PFL impact is consistent with previous literature, which found that women are more likely than men to provide care for a sick spouse. Interestingly, the effect of obtaining PFL on employment was concentrated among less educated spousal caregivers, suggesting that government provision of PFL may reduce pre-existing differences in leave use and related outcomes.

you can read full text or NBER Announcement Summary.

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