Summary of Key Research on Paid Family Leave
Posted by Ashley Fox on December 02, 2016 at 10:44 AM
Paid leave will increase women’s participation in the labor force and reduce the gender wage gap.
- Currently, women in the District are 9% less likely than men to be in the workforce and women who do work are paid on average $8,474 less per year than their male counterparts.
- 11 weeks of guaranteed paid parental leave is estimated to boost women’s participation in the workforce by about 7%-8%. This will be good for the economy and reduce their reliance on public benefits, both during and after the leave.
- Women’s access to paid leave in California was linked to a 7 percent higher hourly wage after childbirth.
Paid leave will reduce the District’s high child mortality rate.
- The District’s infant mortality rate is 7.6 per thousand. That means of the 9,500 babies born in the District each year, around 72 are expected to die during their first year of life.
- Studies suggest that 10 or more weeks of paid family leave could reduce infant mortality by between 3%-10%.
Paid leave will help businesses attract and retain qualified workforces.
- Increasing women’s labor force participation will provide business with stronger applicant pools with more qualified applicants.
- Businesses typically spend thousands of dollars – on average about 20% of a job’s annual salary –to hire a replacement when an employee permanently leaves a job. Because paid leave improves employee morale and reduces employee turnover, paid leave insurance will allow businesses to realize substantial savings on their recruitment and training costs.
- Six years after California implemented its family leave program, a survey of employers found that 91% reported the program either had a positive effect or no noticeable effect on their firm’s profitability, performance, or turnover rates.
- The program is funded by an employer-based payroll tax, which has been set at 0.62 percent. This means that if a business’s annual payroll is $1,000,000, it will pay $6,200 a year to cover all of its employees with access to paid family leave. This will affect roughly 8,000 businesses in the District.
Paid leave increases the emotional and financial well-being of families.
- It’s worth a lot for people to be able to spend more time caring for new babies or sick family members in a way that we can’t fully measure with economic models that focus only on wages and economic activity.
- For example, mothers with paid leave are less likely to go through post-partum depression and fathers with paid leave are much more engages with childcare activities, with huge cognitive and behavioral benefits for the child. Anyone who has faced a life-threatening illnesses knows that support of their families is critical to their ability to survive cancer and other diseases.
- Paid leave plays an especially critical role in providing financial stability when families need it most. Most families can’t afford to pay rent and other living expenses without an income, particularly when they are also facing big new bills for childcare or healthcare. Without paid leave benefits, more lower-income families would need to rely public assistance or might risk bankruptcy.
The D.C. Council’s Budget Office has been conducting an extensive Economic and Policy Impact Statement that will provide more analysis of the expected impacts of adopting a paid leave program in the District.
- We expect this analysis to discuss the economic and policy literature on paid leave’s effects, comparisons with other jurisdictions, as well as economic modeling showing the likely costs and benefits of the program.
 Winegarden C. & Bracy, P., 1995. Demographic Consequences of Maternal-Leave Programs in Industrial Countries: Evidence from Fixed-Effects Models. Southern Economic Journal, 61(4), pp. 1020-1035 (estimates 0.6% to 0.75% increase per week of parental leave).
 Baum, C. & Ruhm, C., 2014. The Effects of Paid Family Leave California on Labor Market Outcomes, Bonn, Germany: Institute for Labor Study.
 Elborgh-Woytek, K. et al., 2013. Women, Work, and the Economy: Macroeconomic Gains from Gender Equity, Washington DC: International Monetary Fund.
 Applebaum, E. & Milkman, R., 2011, Leaves that Pay: Employer and Worker Experiences with Paid Family Leave in California, Washington, DC: Center for Economic and Policy Research.
Newsletter: Finishing the Year Strong
December 11, 2018