The Long-Term Effects of California’s 2004 Paid Family Leave Act on Women’s Careers

It is not obviously a winner policy, at least not from the point of view of boosting women’s labor market opportunities.  In fact it seems to harm them:

This paper uses IRS tax data to evaluate the short- and long-term effects of California’s 2004 Paid Family Leave Act (PFLA) on women’s careers. Our research design exploits the increased availability of paid leave for women giving birth in the third quarter of 2004 (just after PFLA was implemented). These mothers were 18 percentage points more likely to use paid leave but otherwise identical to multiple comparison groups in pre-birth demographic, marital, and work characteristics. We find little evidence that PFLA increased women’s employment, wage earnings, or attachment to employers. For new mothers, taking up PFLA reduced employment by 7 percent and lowered annual wages by 8 percent six to ten years after giving birth. Overall, PFLA tended to reduce the number of children born and, by decreasing mothers’ time at work, increase time spent with children.

That is from a new NBER working paper by Martha J. Bailey, Tanya S. Byker, Elena Patel, and Shanthi Ramnath.  And are you wondering why the number of children falls as a response?  Because the mother ends up staying home with them?  Or do mothers invest more in child quality, thereby lower quantity, as in a Becker model?  In any case a good question.

Comments

" And are you wondering why the number of children falls as a response?"

Yes...

Maybe it's because with PFLA women keep working ..after all their being paid. And after the leave is over they feel guilty for not returning to work so they do. Whereas, without the leave, some women just quit and end up becoming stay at home moms . But that's pure speculation.

The problem with this program, like so many government programs, is that it punishes/taxes those who do not benefit and rewards those who did not earn it. It is stealing/extortion pure and simple.

Smart moms game the system and get cash for nothing.

Personally, I'm absolutely furious about the way my government pays to keep hemophiliac children alive. I could have bought a nice chianti and some fava beans with that.

Makes you wonder about some of these MR posters....

I do not have a problem with anyone using their own money to keep "hemophiliac children alive". I applaud you. I have a problem with the government taking money from me under the threat of force and imprisonment to give to slackers so they can do drugs/alcohol without having to work. The constitution prohibits it but the politicians don't need no stinking constitution.

A contributor might be extended breastfeeding. That can delay fertility.

"Overall, PFLA tended to reduce the number of children born and, by decreasing mothers’ time at work, increase time spent with children."

Now tell us: what metric tells us whether California mothers' spending more time with their offspring is an outcome earnestly to be desired?

The expectation that the outcome can be earnestly desired with legitimacy is perhaps comparable to the expectation that licensed physicians know and care enough about their patients NOT to let them get addicted to opioid painkillers.

Here is my (unscientific) take:

Women who freely choose to take leave are probably the types of mothers who will benefit their children by spending more time with them.

Women who reluctantly or via peer-pressure decide to take time off may not be giving their children a better environment than a daycare center.

In other words, no way could this be generalized to an entire population (more stay at home moms = good!), but through some kind of selection bias I bet the correct decisions are being made (unless mothers are coerced into staying home when they would rather be working).

Yes, it seems like a self selection bias.

It's curious that so many government policies have the effect of reducing the number of children born, particularly those to working- or middle-class families.

Impaired future earnings potential made additional children less affordable.

--but:

which metrics tell us how widespread "rational self-interest" is or can be in contemporary California, or which metrics could tell us which sub-populations of Californians actually wield with due capability "rational egoism"?

"Rational self-interest" and "rational egoism" seem not to prevail in the Golden State, a distinct shortcoming in Californians' practice of egalitarian democracy.

Or put differently, impaired future earnings potential made additional children less affordable, for those who have sufficient future-time orientation to recognize this fact.

As with many government policies in the age of assumed equality there's a pretty clear dysgenic effect at play here, as only the parents dumb enough to not take this into account are going to have more children.

Here are some details:
Beginning July 1, 2004, California workers will receive up to 6 weeks of paid leave per year to care for a new child (birth, adoption, or foster care) or seriously ill family member (parent, child, spouse, or domestic partner).

The benefit will replace up to 55% of wages, up to a maximum of $728 per week in 2004. The maximum benefit will increase automatically each year in accordance with increases in the state's average weekly wage.

Businesses with fewer than 50 employees are not required to hold a job for a worker who goes on paid family leave. Collective bargaining agreements may offer different protections for these workers.

The benefits are not enough to change behavior, except the last one, which will definitely harm them.

Good research. Thanks for adding facts to the discussion.

Women want to stay at home and connect and nuture their kids. This is not rocket science.

The feminazi fight against natures natural unfolding. that is why they are all misreable and angry.

Oh, God. The incels talking points are getting funnier and funnier.

"Women want to stay at home and connect and nuture their kids. "

The comment that this is an "incels talking point" is nearly delusional. It's a thought shared by many if not most mothers. Though financial circumstances are often decisive.

Most mothers, if they didn't have to work, would choose to stay at home with their children, until they reached school age.

"However, Americans also continue to think that having a mother (or parent) at home is best for a child. In a recent Pew Research survey, 60% of respondents said children are better off when a parent stays home to focus on the family, compared with 35% who said children are just as well off with working parents."

https://www.pewsocialtrends.org/2014/04/08/after-decades-of-decline-a-rise-in-stay-at-home-mothers/

It is easy: if you don't want the job, you leave it. It has little to do with paid leave or other policies to help working (outside home) mothers. And, well, the "feminazi" slur applied to any one who wants to treat women like human beings should be treated, is an old incel visiting card. "Oh, if only women hadn't jobs, they wou,d have to take me" is the kind of reasong we have seen here many, many times already.

"It is easy: if you don't want the job, you leave it. It has little to do with paid leave ..."

There are plenty of families that are strapped for money, particularly after a birth. The idea that it's easy to leave your job for every new mother is wrong.

An indictment against rapacious American capitalism. Women would prefer to have a choice. I know that Warren will give them one.

With guaranteed income and guaranteed food, rent, electricity, and other non-cash assistance of $1000 a week, this problem will disappear.

A vote for Warren is a vote for a post-freedom society. Freedom is nothing but slavery.

I thought it was a "feminazi"-provoked issue. Apparently, it is just the system we have doing what it does.

Fail. We've never seen that message and the slur is not applied to any who want to treat women like human beings (that's everyone)

In Canada, here are the details. It is essentially unemployment insurance benefits applied to parents or the mother.

Maternity (for the person giving birth) up to 15 weeks 55% up to $562

Then the second can go to both parents
Standard parental up to 40 weeks, but one parent cannot receive more than 35 weeks of standard benefits 55% up to $562
Extended parental up to 69 weeks, but one parent cannot receive more than 61 weeks of extended benefits 33% up to $337

I'd be curious if there were studies of it's effects. Anecdotally the primary effect is that young women get good jobs in places where they are replaceable. Which would contribute to lower wages overall. Most women take the benefits, few men do, especially for the duration. Someone has to make some money to pay the family expenses. I don't know what effect it has on birth rates, likely not very much. The benefits aren't and can't be enough to replace the income of someone, and seem to be just part of the arrangements where there is a primary bread winner and the women has income that is lower and not consistent to fill the gaps.

I'm not sure what's the point of allowing mother's to stay at home for several months after the birth of a child: is it to benefit the mother or the child? I suspect the mother. For the child, having a stay at home mom benefits the child: older children with stay at home moms do better in school. I'll acknowledge that children with high IQ parents have an advantage, but I suspect the greater advantage is what having affluent parents can provide, not only access to the better schools, but highly successful role models they know personally, and a stay at home mom for good measure.

Indeed. One of the interesting characteristics of the oil boom in Alberta was that it allowed traditional family arrangements. The men could make serious money as trades or service or construction contractors, allowing their wives to stay home and have children. These women were capable and smart, but had the economic choice. Once the kids were in school they would get jobs again, choosing for flexibility.

Not many people have that option, or it doesn't come without serious planning and execution. These government programs are taken advantage of, but the benefits aren't enough to influence decisions.

"I'll acknowledge that children with high IQ parents have an advantage, but I suspect the greater advantage is having affluent parents"

This is demonstrably false

It could change everything.

Good point,

Make America Great Again.

Fire them when they get pregnant.

And, if you can't fire them,

Make it difficult for them to remain employed.

Once again you cast the most Evil motives on people who disagree with. You're a pretty terrible person.

Its not hard when there is an element of truth to it. Forget about motives and look at behavior. Tell me that expectant mothers in the workplace should have no concern after they give birth

Now you are attempting to make a classic Motte and Bailey attack.

Your original accusation was: "Fire them when they get pregnant." Or "Make it difficult for them to remain employed."

Then when challenged you jump back to: "Tell me that expectant mothers in the workplace should have no concern after they give birth "

Ha Ha. You are unable to respond to the challenge. That must mean that you do believe do have a concern about their job after giving birth. Do you suppose that could be related to it being difficult?

You claim that one was different than the other, but they are the same: one was framed as an assertion, and the other a question to draw you out to defend your position, which you were unable to do. Sad. Guess you didn't recognize the rhetorical challenge.

Fail. They are not the same.

One includes the other: "Make it difficult for them to remain employed." and posed as the question: "Tell me that expectant mothers in the workplace should have no concern after they give birth " Note that RatinLab did not answer the challenge, so maybe you can for him. Do they have a concern or not?

"...One includes the other: "

That is the text book example of a Motte and Bailey attack.

"Motte and bailey (MAB) is a combination of bait-and-switch and equivocation in which someone switches between a "motte" (an easy-to-defend and often common-sense statement, such as "culture shapes our experiences") and a "bailey" (a hard-to-defend and more controversial statement, such as "cultural knowledge is just as valid as scientific knowledge") in order to defend a viewpoint. "

https://rationalwiki.org/wiki/Motte_and_bailey

No, Bill is right. It is better to stick with policies that aren't working but which were enacted with good intentions, because, ya know...Trump.

Explain that to me. How is making it difficult for women to remain employed a good thing.

Well, paid leave policy actually reduced employment and lowered wages for women, per the OP, but again, it's the intention that matters here, not the outcome, at least in my opinion.

Answer the question I asked.

Leonard, You might want to look at some other research on this topic:

"The most comprehensive evidence on paid family and medical leave in the United States comes from studies of parental leave in the states, with a focus on women’s labor market outcomes. The research suggests that paid parental leave in California, for example, increased the likelihood that a new mother was working a year after the birth of her child by 18 percentage points, and 2 years following the birth, mothers’ work hours and their weeks at work were 18 percentage points and 11 percentage points higher, respectively, than comparable mothers prior to the implementation of the paid leave policy.3 But questions remain regarding the long-term labor market effects of the policy across the earnings and family income distribution, as well as about the gender dynamics of labor market outcomes, including the gender wage gap, among others" Here is the link with citations: https://equitablegrowth.org/research-paper/paid-family-and-medical-leave-in-the-united-states/

Thank you. I've often found that when I encounter research conflicting with my priors, the best course of action is to just go find some other research that reached a different conclusion and pretend the first bit didn't exist.

Actually, I suspect that you only read the summary paragraph of the posted paper. Correct? I suppose you also didn't notice that income includes up to 55% of wages capped at $728, so when you measure income over time, the income goes down. I didn't read the paper, but did look up the research that had been written on the subject. Without exclusion.

Also, Leonard, you might want to think about selection bias. A person who needs the money (and doesn't want to accept 55% of wages capped at $728) will have a higher income just from that alone than the person who accepts $728 alone or 55% whichever is lower. The person willing to take the lower income from accepting the PFLA benefit is probably a different "type" than the person who accepts the benefit...eg. needs the money less and values the benefit of time off more. Given these two "types" it is not surprising that self - selection would play a role in the choice of one type later moving toward self employment or employment with more flexibility with lower wages.

Also, Leonard, you might want to read the WAPO article on the study:

The negative employment and wage effects surfaced across different ages and wages, and whether new mothers were married or unmarried, among other factors. The effects, however, were much larger for new mothers, compared with mothers who had given birth a second or later time.
These outcomes appear to be driven by “reductions in mothers’ work intensity,” the study’s authors wrote, such as a drop in the number of hours worked or a move to a job with lower wages. These shifts could include a move to self-employment, due to a more flexible schedule.

Here is the link: https://www.washingtonpost.com/dc-md-va/2019/10/26/do-paid-family-leave-policies-help-fix-gender-pay-gap-this-study-found-opposite/

Has there actually been a policy that has increased the birth rate, other than immigration?

Winning World War II did the trick in the US

Losing World War II also helps, but not by as much.

Young Christian couple friends of mine who will not be able to have children, have entered the world of fostering. So far, in each case, the babies they've taken in have been the latest in a line of that mother's children to have been taken by the authorities. [The reason has been failed drug tests sometimes combined with neglect, not outright physical abuse.] Often one or some of the prior babies was accepted by a relative, who cannot deal with another, at least for the moment.

Although it could be totally unrelated - the mother forced to care, in her however-indifferent fashion, with her own babies, would produce more babies just the same - this narrow view into the world of the court system and child protection has so far suggested to me that relieving mothers of caring for their children could possibly have a positive effect on the birthrate, in that they immediately substitute it with another baby. Perhaps you could get the same effect even with the softer approach of taking babies into compulsory, free, universal preschool/daycare at birth.

This is a good example of where economists should have measured something other than wages or income: happiness.

Economists measure money but not happiness.

Scrooge the Duck is happy only with money, while humans may value other things just as much.

That's my take as well. But isn't this the dead end in these discussions, where we reach the ideological bedrock that won't be moved? Libertarian-types think that money DOES equal happiness, and if you were to say otherwise you're jus deluding yourself. I don't see it that way, but if you're going to claim this is just my ego/brain/whatever deceiving myself, then I can't really counter that. How could you?

"Libertarian-types think that money DOES equal happiness"

Quite the opposite. It's statists who believe cost-benefit analysis can justify every regulation of human behavior

I was going to say - why are smaller wages necessarily a bad thing? Especially in the US where everyone is working 60 hours, perhaps giving employees some more leisure time would bring the equilibrium closer to optimal, no? At least in Europe workers seem to frequently prefer lower weekly work burdens to higher wages, when bargaining, because first world wages are enough to live well anyway. No need to bring a few million to your grave, and women seem to grasp this.

Can expound on who is "giving" the employee leisure time?
Oh, right the employer. If you think something is good for society, then have society pay for it, not employers.

Exceedingly few people in the U.S. work 60 hours a week and most of them are rich

Selection bias? Work-hating women take up PFLA? Or employers stop trusting in them and in their effort? "For new mothers, taking up PFLA reduced employment by 7 percent and lowered annual wages by 8 percent six to ten years after giving birth. "

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