A big argument for mandatory paid family leave is that it would help close the gender pay gap and level the playing field with men. Women who had access to paid leave would stay in their jobs and not derail their careers to care for newborns, the theory goes. Turns out, the opposite has happened in California, according to a comprehensive new study.
A study published this week by the National Bureau of Economic Research examined the landmark 2004 paid leave law’s employment effects on first-time mothers. The “results run contrary to claims that California’s 2004 Paid Leave Act improved women’s short- or long-term career outcomes,” the authors concluded.
The researchers found that “paid leave is associated with a statistically significant short-run decrease in employment of 2.1 percentage points and a long-run decrease of 4.1 percentage points.
“Moreover, we find little evidence that California’s 2004 Paid Family Leave Act increased women’s wage earnings,” the authors wrote.
The study found that “first-time moms who used the policy saw their employment fall by 7% and annual wages fall by 8% over the next decade,” a University of Michigan summary of the report noted. “Cumulatively, new moms taking up paid leave had fewer children and had earned about $25,681 less by 2014.”
“We were surprised that this modest policy seems to be nudging mothers out of the labor force,” University of Michigan economist and lead author Martha Bailey said.
The study, which examined tax returns, found that some women replaced a portion of their lost income with alternative sources, “suggesting that paid leave encourages women to transition to more flexible working arrangements.”
That’s important because proponents of paid leave insist that government must mandate this particular benefit instead of others that polls show employees would rather have, one of the most popular being flexible working arrangements.
As we pointed out in February, 88 percent of employees in a Harvard survey said they’d accept lower pay in exchange for more flexible work hours, but only 42 percent said the same of paid leave.
Flex time or remote working arrangements could encourage mothers to stay with an employer — something California’s paid leave program did not achieve.
“Contrary to predictions that paid leave policies increase attachment to pre-birth employers (and, thus, help women retain valuable firm-specific human capital), women who had access to paid leave were no more likely to remain with their pre-birth employer than women without paid leave access, both in the short and long run.”
California’s paid leave law did not rebalance traditional gender roles, either.
“Despite the fact that California’s PFLA also gave men paid leave for family and infant care, the study found no impact on men’s employment or annual wage earnings. California’s PFLA seems to be encouraging men and women into traditional gender roles rather than leveling the playing field at work, according to Bailey.”
New mothers who took advantage of paid leave spent more time with their children, the researchers found. That tends to happen when mothers leave the labor force.
So, in sum, the law pulled women out of the workforce, reduced their career earnings, and reinforced traditional gender roles.
One could like any or all of those outcomes, but they cannot be called “progressive” and they do not achieve paid leave proponents’ stated goals of keeping women in the workforce and shrinking the gender pay gap.