The longer‐term labor market impacts of paid parental leave

Abstract

Although paid family leave (PFL) has the potential to improve labor market and other outcomes for mothers, there is also concern that PFL might also lead to discrimination against women of childbearing age. We examine the impact of California's paid family leave law (CA-PFL) on labor market outcomes over time during the post-law decade, as well as the law's effect for groups with differing levels of education. Results indicate that the law had negligible impacts on young women's labor force participation, unemployment duration, and earnings, but persistent small negative impacts on their relative employment. The negative employment impacts are concentrated among college-educated women, for whom the law is associated with a 2–3 percentage point decrease in labor force participation and a 1–2 percentage point decline in employment. The CA-PFL does not appear to have impacted the relative labor force participation, employment, unemployment duration, or earnings of less-educated young females.