Access to paid family leave improves U.S. women’s labor market outcomes following a spouse’s health shock
Women now make up almost half of the U.S. labor force, according to the U.S. Department of Labor, and families are increasingly reliant on women’s earnings. Despite their growing labor market responsibilities, women tend to shoulder most household responsibilities as well, including acting as the primary caregivers for their children, spouses, and older or disabled family members.
This dual role means that women workers face particularly significant challenges balancing professional and family responsibilities. These challenges are amplified when a woman’s partner or child becomes seriously injured or ill, impacting her ability to continue working.
Paid family leave policies, which provide workers with partially paid time off to care for a loved one, can help workers prioritize their care responsibilities without fear of losing their income or their jobs. Many studies have examined the impacts of paid parental leave, or time off to care for a newborn or newly adopted child, as well as paid sick leave, which is typically used to address one’s own short-term illness. But less is known about paid leave taken to care for an ill family member.
Our new working paper, “The Impact of Paid Family Leave on Families with Health Shocks,” builds on this literature by demonstrating how access to paid caregiving leave significantly improves job continuity among women workers whose spouses experience a health shock. We analyze the impacts of the paid family leave policies implemented in California in 2004, New Jersey in 2009, and New York in 2018 on the labor market and mental health outcomes of individuals whose spouses or children undergo a surgery or are hospitalized.
Our paper uses restricted-use data from the U.S. Department of Health and Human Services’ Medical Expenditure Panel Survey, which follows U.S. households for five rounds of surveys over a 2-year period. These surveys collect detailed information on respondents’ demographic and socioeconomic characteristics, the precise timing and diagnosis codes associated with any inpatient, outpatient, and emergency department visits, prescription drug use and medical conditions, labor market outcomes, and states of residence.
Our study then uses difference-in-difference and event-study models that compare the differences in labor market and mental health outcomes, measured in post-health-shock rounds of the survey, between individuals before and after paid family leave implementation in California, New Jersey, and New York. It also compares these differences with analogous differences in states with no change in paid family leave access over the analysis time period.
Our main finding is that access to paid family leave leads to a 7 percentage point decline in the likelihood that the healthy wives of individuals who experience a hospitalization or surgery will “[leave] a job to care for home or family” in the aftermath of the health shock. These findings are concentrated among women workers, and those with 12 years or fewer of formal education.
The impacts on men’s labor market and mental health outcomes, as well as on women’s mental health outcomes, are more mixed and less conclusive. We also do not find statistically significant impacts of paid family leave on the outcomes of working parents whose children experience a health shock. This finding is in line with other survey evidence indicating that parents of children with healthcare needs experience large barriers to actually taking paid leave, even when they have access to it.
Our findings on the labor market impacts for women are consistent with prior research about the impacts of paid family leave on new mothers. One study, for instance, shows that paid parental leave allows new mothers to more easily step away from work temporarily and then resume their professional duties once their children are a little bit older. Other studies find similar positive economic effects of paid family leave on new parents.
August 20, 2019
While more research is needed to understand how paid family leave may affect other types of caregivers—such as those providing eldercare to aging parents—our results indicate that paid family leave can have a significant impact on job continuity among women whose spouses need care. Additionally, women, and especially mothers, often face lower wages and other professional penalties that their male counterparts do not. The fact that our results are driven by women—and particularly those with lower levels of education, who may not have access to employer-provided paid leave—points to paid family leave as a policy tool that can reduce economic inequality while supporting a healthier balance between the important work done both in U.S. homes and in the U.S. labor market.
—Courtney Coile is the William R. Kenan, Jr. Professor of Economics at Wellesley College. Maya Rossin-Slater is an associate professor of health policy at Stanford University. Amanda Su is a Ph.D. student in health policy specializing in health economics at Stanford University.
To learn more about paid family and medical leave research, including three new research products funded by Equitable Growth examining the impact of paid leave amid the COVID-19 pandemic, please consider attending Equitable Growth’s upcoming webinar, “Paid leave and the pandemic: New evidence from Families First and lessons for federal policymakers.” Click here to register for the event.